Chapter 3901-1 General Provisions

The purpose of this rule provides for the giving
of proper notice by publication for various sections of
Chapter 1731., 1739., 1751., or 1761. or Title XXXIX of
the Revised Code, or as additionally determined by the superintendent of
insurance for promulgation to the public of such insurance matters as are
of widespread public interest and which do not set forth with particularity the
means, content and frequency of notice nor come under
the notice requirements of Chapter 119. of the Revised Code .

Whenever Chapter 1731., 1739., 1751., or
1761. or Title XXXIX of the Revised Code, or as additionally determined by the
superintendent of insurance require public notice to be given by the
superintendent of insurance,
and where the method and content of notice are not set forth with
particularity, and do not fall within the notice requirements of Chapter
119. of the Revised Code . Such notice may be given by publication in a newspaper of general
circulation of not less than ten thousand in Cuyahoga, Franklin, Hamilton, and
Lucas counties.

(1)
Whenever an insurance company or any
individual or firm connected therewith, subject to the regulation and
jurisdiction of the department of insurance,
is
required to give public notice by any section of the Revised Code of Ohio, in
which the method and content of notice are not set forth with particularity,
such public notice shall be given in accord with paragraph
(C) of this rule hereof.

Whenever the superintendent of insurance
determines that the subject matter of public notice is of an unusual nature and
appropriate for more widespread publication, the superintendent
may direct that such notice be also made in newspapers of general circulation
of not less than ten thousand in one or more of the following
counties: Mahoning, Montgomery, Summit and Athens. Whenever the subject matter
of public notice is of a regional nature, the superintendent of insurance
may direct such special publication as appropriate. In any case, the
superintendent of insurance
may direct that publication be made more than once, as frequently as may be
appropriate. In addition to the public notice provided by this rule, the
superintendent of insurance
may give, or order, such other means of notice as the superintendent
deems necessary or appropriate.

If any paragraph, term or provision of
this rule is adjudged invalid for any reason, the judgment shall not affect,
impair or invalidate any other paragraph, term or provision of this rule, but
the remaining paragraphs, terms and provisions shall be and continue in full
force and effect.

This rule is to regulate employee access to the confidential
personal information that the department of insurance (department) keeps. This
rule applies to both electronic records and records kept on
paper.

This rule is promulgated under the authority of division (B)
of section 1347.15 of the Revised Code that
requires each state agency to adopt rules under Chapter 119. of the Revised
Code to regulate access to confidential personal information. Section
3901.041 of the Revised Code
provides that the superintendent of insurance (superintendent) shall adopt,
amend and rescind rules to discharge the superintendent's duties and exercise
the superintendent's powers.

For the purpose of this rule promulgated in accordance with
section 1347.15 of the Revised Code, the
following definitions, as set out by the department of administrative services
in rule
123:3-2-01 of the
Administrative Code, apply:

(1)
"Access" as a noun means an instance of copying, viewing, or otherwise
perceiving whereas "access" as a verb means to copy, view, or otherwise
perceive.

(2)
"Acquisition of a new
computer system" means the purchase of a "computer system," as defined in this
rule, that is not a computer system currently in place nor one for which the
acquisition process has been initiated as of the effective date of the agency
rule addressing requirements in section
1347.15 of the Revised
Code.

(4)
"Confidential personal information" (CPI) has the meaning as defined by
division (A)(1) of section
1347.15 of the Revised Code and
identified by rules promulgated by the agency in accordance with division
(B)(3) of section 1347.15 of the Revised Code that
reference the federal or state statutes or administrative rules that make
personal information maintained by the agency confidential.

(5)
"Employee of the state agency" means each
employee of a state agency regardless of whether he or she holds an elected or
appointed office or position within the state agency. "Employee of the state
agency" is limited to the specific employing state agency.

(6)
"Incidental contact" means contact with
the information that is secondary or tangential to the primary purpose of the
activity that resulted in the contact.

(10)
"Personal information"
has the same meaning as defined in division (E) of section
1347.01 of the Revised
Code.

(11)
"Personal information
system" means a "system" that "maintains" "personal information" as those terms
are defined in section
1347.01 of the Revised Code.
"System" includes manual and computer systems.

(14)
"Routine information that is maintained
for the purpose of internal office administration, the use of which would not
adversely affect a person" as that phrase is used in division (F) of section
1347.01 of the Revised Code
means personal information relating to employees and maintained by the agency
for internal administrative and human resource purposes.

(15)
"System" has the same meaning as defined
by division (F) of section
1347.01 of the Revised
Code.

(16)
"Upgrade" means a
substantial redesign of an existing computer system for the purpose of
providing a substantial amount of new application functionality, or application
modifications that would involve substantial administrative or fiscal resources
to implement, but would not include maintenance, minor updates and patches, or
modifications that entail a limited addition of functionality due to changes in
business or legal requirements.

(D)
Procedures for accessing confidential
personal information (as required by divisions (B)(1) and (B)(5) to (B)(8) of
section 1347.15 of the Revised Code).

For personal information systems, whether manual or computer
systems, which contain confidential personal information, the department shall
do the following:

Personal information systems of the department are managed on a
"need-to-know" basis whereby the information owner determines the level of
access required for an employee of the department to fulfill his or her job
duties. The determination of access to confidential personal information shall
be approved by the employee's supervisor and the information owner prior to
providing the employee with access to confidential personal information within
a personal information system. The department shall establish procedures for
determining a revision to an employee's access to confidential personal
information upon a change to that employee's job duties including, but not
limited to, transfer or termination. Whenever an employee's job duties no
longer require access to confidential personal information in a personal
information system, the employee's access to confidential personal information
shall be removed.

(2)
Individual's request for a list of confidential personal information

Upon the signed written request of any individual for a list of
confidential personal information about the individual maintained by the
department, the department shall do all of the following:

(a)
Verify the identity of the individual by
a method that provides safeguards commensurate with the risk associated with
the confidential personal information;

(b)
Provide to the individual the list of
confidential personal information that does not relate to an investigation
about the individual or is otherwise not excluded from the scope of Chapter
1347. of the Revised Code; and

(c)
If all information relates to an investigation about that individual, inform
the individual that the agency has no confidential personal information about
the individual that is responsive to the individual's
request.

(a)
Upon discovery or
notification that confidential personal information of a person has been
accessed by an employee for an invalid reason, the department shall notify the
person whose information was invalidly accessed as soon as practical and to the
extent known at the time. However, the department shall delay notification for
a period of time necessary to ensure that the notification would not delay or
impede an investigation or jeopardize homeland or national security.
Additionally, the department may delay the notification consistent with any
measures necessary to determine the scope of the invalid access, including
which individuals' confidential personal information invalidly was accessed,
and to restore the reasonable integrity of the system.

"Investigation" as used in this paragraph means the
investigation of the circumstances and involvement of an employee surrounding
the invalid access of the confidential personal information. Once the
department determines that notification would not delay or impede an
investigation, the department shall disclose the access to confidential
personal information made for an invalid reason to the person.

(b)
Notification provided by the
department shall inform the person of the type of confidential personal
information accessed and the date(s) of the invalid access.

(c)
Notification may be made by any method
reasonably designed to accurately inform the person of the invalid access,
including written, electronic or telephone notice.

The superintendent shall designate an employee of the
department to serve as the data privacy point of contact. The data privacy
point of contact shall work with the chief privacy officer within the office of
information technology to assist the department with both the implementation of
privacy protections for the confidential personal information that the
department maintains and compliance with section
1347.15 of the Revised Code and
the rules adopted pursuant to the authority provided by that
chapter.

The superintendent shall designate an employee of the
department to serve as the data privacy point of contact who shall timely
complete the privacy impact assessment form developed by the office of
information technology.

Pursuant to the requirements of division (B)(2) of section
1347.15 of the Revised Code,
this rule contains a list of valid reasons, directly related to the
department's exercise of its powers or duties, for which only employees of the
department may access confidential personal information regardless of whether
the personal information system is a manual system or computer system.

Performing the following functions constitute valid reasons for
authorized employees of the department to access confidential personal
information:

The following federal statutes or regulations or state statutes
and administrative rules make personal information maintained by the department
confidential and identify the confidential personal information within the
scope of rules promulgated by the department in accordance with section
1347.15 of the Revised
Code:

(4)
Medical records pertaining to an eligible
person under the American with Disabilities Act:
42 U.S.C. section 12112(d)(3)(B).

(5)
Bureau of criminal identification and
investigation records: division (H) of section
109.57 of the Revised Code
and section
4776.04 of the Revised
Code.

(6)
Public employees
retirement system (PERS) information (the individual's statement of previous
service, amount of a monthly allowance or benefit paid to an individual and the
individual's personal history record that includes address, telephone number,
social security number, record of contributions, correspondence with the public
employees retirement system or other information determined by the public
employees retirement board to be confidential): division (A) of section
145.27 of the Revised
Code.

(7)
Medical reports and
recommendations required by the public employees retirement system: division
(B) of section 145.27 of the Revised
Code.

(13)
Any data or information pertaining to the
diagnosis, treatment, or health of any enrollee or applicant for enrollment
that is obtained by the health insuring corporation from the enrollee or
applicant, or from any health care facility or provider: division (B) of
section 1751.52 of the Revised
Code.

(16)
Identity of an individual on whom an HIV test is
performed, the results of the test and the identity of any individual diagnosed
as having AIDS or an AIDS-related condition: section
3701.243 of the Revised
Code.

(17)
Records pertaining to an insurance fraud
investigation are confidential law enforcement investigatory records (CLEIR)
and are protected to the extent of the CLEIR exemption from section
149.43 of the Revised Code until
the expiration of all applicable federal and state statutes of limitation:
section 3901.44 of the Revised
Code.

(19)
Records and information pertaining to an
investigation of a license applicant or of an agent, solicitor, broker or a
person licensed under the code sections covering public insurance adjusters and
third party administrators until notice and opportunity for hearing is given or
until three years have passed since the close of the investigation: section
3905.24 of the Revised
Code.

(20)
All medical information
solicited or obtained by any viatical settlement licensee: division (G) of
section 3916.07 of the Revised
Code.

(21)
Names and individual
identification data for all viators: division (D)(1) of section
3916.11 of the Revised
Code.

(22)
All proprietary
information of a viatical settlement licensee, all individual transaction data
regarding the business of viatical settlements and data that could compromise
the privacy of personal, financial and health information of the viator or
insured: division (E) of section
3916.12 of the Revised
Code.

(23)
With certain specified
exceptions, identity as a viator or a viatical settlement insured, including
the viator's or the insured's name and individual identification data, or the
viator or the insured's financial or medical information: section
3916.13 of the Revised
Code.

(24)
Documents and evidence
provided to or obtained by the superintendent in an investigation of any
suspected or actual fraudulent viatical settlement acts or fraudulent insurance
acts: division (E)(1) of section
3916.18 of the Revised
Code.

(25)
Records containing information pertaining to the medical history, diagnosis,
prognosis or medical condition of a covered person pursuant to the external
review laws under Chapter 3922. of the Revised Code and sections
1751.77 to
1751.87 of the Revised Code:
section 3922.21 of the Revised
Code.

(26)
Medical claims data required to be reported to
the superintendent by section
3929.302 of the Revised Code:
division (G) of section
3929.302 of the Revised
Code.

(27)
Driver's license number or state identification
card number: section 4501.27 of the Revised Code
and 18 U.S.C. sections 2721 and
2725.

(28)
Law enforcement automated data system (LEADS) information: section
5503.10 of the Revised Code and
rule 4501:2-10-06 of the
Administrative Code.

(29)
Any information
gained as the result of returns, investigations, hearings, or verifications
required or authorized by Chapter 5747. of the Revised Code on income tax:
section 5747.18 of the Revised Code.

As statutes are enacted or amended and rules are promulgated or
revised, the list of confidentiality provisions provided in this rule may be
subject to change. Any changes that occur before the time of the five-year rule
review process for this rule shall be available to any requester by
making a request to the department's office of legal services.

When the department acquires a new computer system that
stores, manages or contains confidential personal information, the department
shall include a mechanism for recording specific access by employees of the
department to confidential personal information in the system.

When the department modifies an existing computer system that
stores, manages or contains confidential personal information, the department
shall make a determination whether the modification constitutes an upgrade. Any
upgrades to a computer system shall include a mechanism for recording specific
access by employees of the department to confidential personal information in
the system.

(a)
The department shall require
employees of the department who access confidential personal information within
computer systems to maintain a log that records that access.

(b)
Access to confidential personal
information is not required to be entered into the log under the following
circumstances:

(i)
The employee of the
department is accessing confidential personal information for official
department purposes, including research, and the access is not specifically
directed toward a specifically named individual or a group of specifically
named individuals.

(ii)
The
employee of the department is accessing confidential personal information for
routine office procedures and the access is not specifically directed toward a
specifically named individual or a group of specifically named
individuals.

(iii)
The employee of
the department comes into incidental contact with confidential personal
information and the access of the information is not specifically directed
toward a specifically named individual or a group of specifically named
individuals.

(iv)
The employee of
the department accesses confidential personal information about an individual
based upon a request made under either of the following circumstances:

(a)
The individual requests confidential
personal information about himself or herself.

(b)
The individual makes a request that the
department takes some action on that individual's behalf and accessing the
confidential personal information is required in order to consider or process
that request.

(c)
For purposes of
this paragraph, the department may choose the form or forms of logging, whether
in electronic or paper formats.

If any paragraph, term or provision of this rule is adjudged
invalid for any reason, the judgment shall not affect, impair or invalidate any
other paragraph, term or provision of this rule, but the remaining paragraphs,
terms and provisions shall be and continue in full force and
effect.

This rule is issued by the superintendent of insurance pursuant
to division (H) of section
3901.31 of the Revised Code,
which empowers the superintendent to adopt, amend, and rescind rules, pursuant
to Chapter 119. of the Revised Code, which will enable the superintendent to
carry out the duties imposed by section
3901.31 of the Revised Code.
Division (A) of section
3901.31 of the Revised Code
requires every person who is directly or indirectly the beneficial owner of
more than ten per cent of any class of any equity security of a domestic stock
insurance company or who is a director or officer of such company to file with
the superintendent of insurance on or before January 31, 1966, or within ten
days after the person becomes such beneficial owner, director, or officer, a
statement in such form as the superintendent of insurance may prescribe of the
amount of all equity securities of such company of which the person is the
beneficial owner, and within ten days after the close of each calendar month
thereafter, if there has been a change in such ownership during such month, to
file with the superintendent of insurance a statement, in such form as the
superintendent of insurance may prescribe, indicating the person's ownership at
the close of the calendar month and such changes in the person's ownership as
have occurred during such calendar month. The purpose of this rule is to
promulgate procedures and forms to be adhered to in filing initial statements
of changes in beneficial ownership of any equity security. Effective April 4,
1985, section 3901.31(A) of
the Revised Code was amended to exclude from application of this filing
requirement domestic stock insurance companies which are wholly owned
subsidiaries of an insurance holding company system.

(1)
Initial statements of beneficial
ownership of equity securities shall be filed on Form I.S.S., as set forth in
paragraph (C)(9) of this rule. Statements of changes in such beneficial
ownership shall be filed on Form C.S.S., as set forth in paragraph (D)(11) of
this rule. All such statements shall be prepared in accordance with the
requirements of the applicable form and filed as required.

(a)
A statement on Form I.S.S. shall be filed
by every person who is directly or indirectly the beneficial owner of more than
ten per cent of any class of equity security of a domestic stock insurance
company or who is a director or officer of such company.

(b)
When section
3901.31 of the Revised Code
became law, persons who held any of the relationships specified in paragraph
(B)(2) of this rule were required to file a statement on Form I.S.S. on or
before January 31, 1966. Persons who subsequently assume any of the specified
relationships are required to file a statement within ten days after assuming
such relationship.

(c)
A separate
statement shall be filed with respect to the securities of each domestic stock
insurance company.

(a)
A statement on Form C.S.S.
shall be filed by every person who is directly or indirectly the beneficial
owner of more than ten per cent of any class of equity security of a domestic
stock insurance company or who is a director or officer of such company, who
has filed a Form I.S.S. with the department, and who has during any month had
any change in his beneficial ownership of any class of equity security of such
company. Any beneficial owner, director, or officer who is required to file a
statement on Form C.S.S. with respect to any change in his beneficial ownership
of equity securities which occurs within six months after he became a
beneficial owner, director, or officer of such company shall include in the
first such statement the information called for by Form C.S.S. with respect to
all changes in his beneficial ownership of equity securities of such company
which occurred within six months prior to the filing of such statement.

(b)
A statement on Form C.S.S.
shall be filed by any person who has ceased to be such beneficial owner,
director, or officer of a domestic stock insurance company with respect to any
change in his beneficial ownership of equity securities of such company which
occurs on or after the date on which he ceased to be such beneficial owner,
director, or officer if such change occurs within six months after any change
in his beneficial ownership of such securities prior to such date.

(c)
Statements on Form C.S.S. which are
required to be filed shall be filed on or before the tenth day after the end of
each month in which any change in beneficial ownership has occurred. A separate
statement shall be filed with respect to the securities of each domestic stock
insurance company.

(4)
Any person who has ceased to be a beneficial owner, director, or officer of a
domestic stock insurance company shall give written notice to the
superintendent of insurance of the date on which he ceased to be such
beneficial owner, director, or officer within thirty days after said date.

Indicate clearly the relationship of the reporting person to
the company; for example, "director," "director and vice president,"
"beneficial owner of more than ten per cent of the company's common stock,"
etc.

The information as to beneficial ownership of securities shall
be given as of the date on which the event occurred which requires the filing
of a statement on this form; for example, when the person whose ownership is
reported became a director or officer of the company or a beneficial owner of
more than ten per cent of the company's equity securities.

Under "nature of ownership," state whether ownership of the
securities is "direct" or "indirect." If the ownership is indirect, i.e.,
through a partnership, corporation, trust or other entity, indicate in a
footnote, or other appropriate manner, the name or identity of the medium
through which the securities are indirectly owned. The fact that securities are
held in the name of a broker or other nominee does not, of itself constitute
indirect ownership. Securities owned indirectly shall be reported on separate
lines from those owned directly and also from those owned through a different
type of indirect ownership.

In stating the amount of securities beneficially owned, give
the face amount of debt securities or the number of shares or other units of
other securities. In the case of securities owned indirectly, the entire amount
of securities owned by the partnership, corporation, trust or other entity,
shall be stated. The person whose ownership is reported may, if he so desires,
also indicate in a footnote, or other appropriate manner, the extent of his
interest in the partnership, corporation, trust or other entity.

(a)
If the statement is filed for a
corporation, partnership, trust, etc., the name of the organization shall
appear over the signature of the officer or other person authorized to sign the
statement. If the statement is filed for an individual, it shall be signed by
him or specifically on his behalf by a person authorized to sign for him.

(b)
In those cases where the
statement is signed by someone other than the person whose ownership is being
reported, documentary evidence of the signing authority shall be filed with the
statement.

Indicate clearly the relationship of the reporting person to
the company; for example, "director," "director and vice president,"
"beneficial owner of more than ten per cent of the company's common stock,"
etc.

Every transaction shall be reported even though purchases and
sales during the month are equal or the change involves only the nature of
ownership; for example, from direct or indirect ownership. Beneficial ownership
at the end of the month of all classes of securities required to be reported
shall be shown even though there has been no change during the month in the
ownership of securities of one or more classes.

In stating the amount of the securities acquired, disposed of,
or beneficially owned, give the face stated. The person whose ownership is
reported may, if he so desires, also indicate in a footnote, or other
appropriate manner, the extent of his interest in the transaction or holdings
of the partnership, corporation, trust or other entity.

Under "nature of ownership," state whether ownership of the
securities is "direct" or "indirect." If the ownership is indirectly, i.e.,
through a partnership, corporation, trust or other entity, indicate in a
footnote, or other appropriate manner, the name or identity of the medium
through which the securities are indirectly owned. The fact that securities are
held in the name of the broker or other nominee does not, of itself, constitute
indirect ownership. Securities owned indirectly shall be reported on separate
lines from securities owned directly and from securities owned through a
different type of indirect ownership.

If the transaction was with the issuer of the securities, so
state. If it involved the purchase of securities through the exercise of
options, so state and give the exercise price per share. If any other purchase
or sale was effected otherwise than in the open market, the fact shall be
indicated. If the transaction was not a purchase or sale, indicate its
character; for example, gift, stock dividend, etc., as the case may be. The
foregoing information may be appropriately set forth in the table or under
"remarks" at the end of the table.

(a)
If the statement is filed for a
corporation, partnership, trust, etc., the name of the organization shall
appear over the signature of the officer or other person authorized to sign the
statement. If the statement is filed for an individual, it shall be signed by
him or specifically on his behalf by a person authorized to sign for him.

(b)
In those cases where the
statement is signed by someone other than the person whose partnership is being
reported, documentary evidence of the signing authority shall be filed with the
statement.

Division (B) of section
3901.99 of the Revised Code
provides that "Whoever violates any law relating to the superintendent of
insurance, or any law of this state, relating to insurance as defined in
division (A)(1) of section
3901.04 of the "Revised Code for
the violation of which no penalty is otherwise provided in the Revised Code,
shall be fined not more than twenty-five thousand dollars, imprisoned not more
than six months, or both."

Section
3901.041 of the Revised Code
provides that the superintendent of insurance shall adopt, amend, and rescind
rules and make adjudications necessary to discharge his duties and exercise his
powers under Title 39 of the Revised Code.

Sections
3901.20 and
3901.21 of the Revised Code
respectively prohibit unfair or deceptive practices in the business of
insurance and define certain acts or practices as unfair or deceptive. Section
3901.21 of the Revised Code also
provides that the enumeration of specific unfair or deceptive acts or practices
in the business of insurance is not exclusive or restrictive or intended to
limit the powers of the superintendent of insurance to adopt rules to implement
that section. The purpose of this rule is to define certain additional unfair
trade practices and to set forth required procedures in connection therewith.

(a)
Misrepresenting a
pertinent policy provision by making any payment, settlement, or offer of first
party benefits, which, without explanation, does not include all amounts which
should be included according to the claim filed by the first party claimant and
investigated by the insurer;

(b)
Denying a claim on the grounds of a specific policy provision, condition, or
exclusion without reference to such provision, condition, or exclusion;

(2)
Failing to
acknowledge pertinent communications with respect to claims arising under
insurance policies in writing, or by other means so long as an appropriate
notation is made in the claim file of the insurer, within fifteen days of
receiving notice of a claim in writing or otherwise;

(3)
Failing to make an appropriate reply
within twenty-one days of all other pertinent communications and/or any
inquiries of the department of insurance respecting a claim;

(4)
Failing to adopt and implement reasonable
procedures to commence an investigation of any claim filed by either a first
party or third party claimant, or by such claimant's authorized representative,
within twenty-one days of receipt of notice of claim;

(5)
Failing to mail or furnish claimant or
the claimant's authorized representative, a notification of all items,
statements and forms, if any, which the insurer reasonably believes will be
required of such claimant, within fifteen days of receiving notice of claim,
unless the insurer, based on the information then in its possession does not
yet know all such requirements, then such notification shall be sent, within a
reasonable time;

(6)
Not offering
first party or third party claimants, or their authorized representatives who
have made claims which are fair and reasonable and in which liability has
become reasonably clear, amounts which are fair and reasonable as shown by the
insurer's investigation of the claim, providing the amounts so offered are
within policy limits and in accordance with the policy provisions;

(7)
Compelling insureds to institute suits to
recover amounts due under its policies by offering substantially less then the
amounts ultimately recovered in suits brought by them when such insureds have
made claims for amounts reasonably similar to the amounts ultimately recovered;

(8)
Making known to insureds or
claimants a policy of appealing from arbitration awards in favor of insureds or
claimants for the purpose of compelling them to accept settlements or
compromises less than the amount awarded in arbitration;

(9)
Attempting settlement or compromise of
claims on the basis of applications which were altered without notice to, or
knowledge, or consent of insureds;

(10)
Attempting to settle or compromise
claims for less than the amount which the insureds had been led reasonably to
believe they were entitled to, by written or printed advertising material
accompanying or made part of an application;

(11)
Attempting to delay the investigation or
payment of claims by requiring an insured and his physician to submit a
preliminary claim report and then requiring the subsequent submission of formal
proof of loss forms, both of which submissions contain substantially the same
information;

(12)
Failing to
advise the first party claimant or the claimant's authorized representative, in
writing or by other means so long as an appropriate notation is made in the
claim file of the insurer, of the acceptance or rejection of the claim, within
twenty-one days after receipt by the insurer of a properly executed proof of
loss;

(a)
Failing to notify such claimant or
the claimant's authorized representative, within twenty-one days after receipt
of such proof of loss, that the insurer needs more time to determine whether
the claim should be accepted or rejected;

(b)
Failing to send a letter to such claimant
or, the claimant's authorized representative, stating the need for further time
to investigate the claim, if such claim remains unsettled ninety days from the
date of the initial letter setting forth the need for further time to
investigate;

(c)
Failing to send
to such claimant or authorized representative every ninety days after the first
ninety-day claim investigation period, a letter setting forth the reasons
additional time is needed for investigation, unless the delay is caused by
factors beyond the insurer's control;

(13)
Failing to advise such claimant or
claimant's authorized representative, of the amount offered, if such claim is
accepted in whole or in part;

(14)
Refusing payments of claims solely on the basis of the insured's request to do
so without making an independent evaluation of the insured's liability based
upon all available information;

(15)
Failing to adopt and implement
reasonable standards for the proper handling of written communications,
primarily expressing grievances, received by the insurer from insureds or
claimants;

(16)
Failing to pay any
amount finally agreed upon in settlement of all or part of any claim or
authorized repairs to be made upon final agreement not later than five days
from the receipt of such agreement by the insurer at the place from which the
payment or authorization is to be made or from the date of the performance by
the claimant of any condition set by such agreement, whichever is later.

(17)
For purposes of this rule,
the following definitions shall apply;

(a)
"Investigation" shall mean all activities of the company related directly or
indirectly to the determining of liabilities under the coverages afforded by
the policy. This shall include, but not be limited to, a bona fide effort to
contact all insureds and claimants within a reasonable period after
notification of loss. Evidence of a bona fide effort must be maintained in the
file. The investigation shall be deemed concluded upon the company's
affirmation or denial ofliability.

(b)
"Notice of Claim" as applied to an
insurer shall include notification given to an agent of an insurer.

(c)
"Settlement of claims" shall mean all
activities of the company related directly or indirectly to the determination
of the extent of damages due under coverages afforded by the policy. This shall
include, but not be limited to, the requiring or preparing of repair estimates.

(d)
"Days" means calendar days.
However, when the last day of a time limit stated in this rule falls on a
Saturday, Sunday or holiday, the time limit is extended to the next immediate
following day that is not a Saturday, Sunday or holiday.

If any paragraph, term, or provision of this rule be adjudged
invalid for any reason, such judgment shall not affect, impair, or invalidate
any other paragraph, term, or provision of this rule, but the remaining
paragraphs, terms, and provisions shall be in and continue in full force and
effect.

The purpose of this rule is to further
define unfair trade practices to include dishonest and predatory practices
involving the sale of certain life insurance products to active duty members of
the United States armed forces and their families and to set acceptable
standards for such sales. Sections
3901.20 and
3901.21 of the Revised Code,
respectively, prohibit unfair or deceptive trade practices in the business of
insurance and define certain acts or practices as unfair or deceptive. Section
3901.21 of the Revised Code also
provides that the enumeration of specific unfair or deceptive acts or practices
in the business of insurance is not exclusive or restrictive or intended to
limit the powers of the superintendent of insurance to adopt rules to implement
that section.

This rule applies to the solicitations
and sales of life insurance and annuity products by insurers and insurance
agents to active duty members of the United States armed forces and their
families. This rule applies in addition to other statutes and rules governing
the sale and solicitations of life insurance and annuity products.

(b)
Group life insurance or group annuities
where there is no in-person, face-to-face solicitation of individuals by an
insurance agent or where the contract or certificate does not include a side
fund;

(c)
An application to the
existing insurer that issued the existing policy or contract when a contractual
change or a conversion privilege is being exercised; or, when the existing
policy or contract is being replaced by the same insurer pursuant to a program
filed with and approved by the superintendent; or, when a term conversion
privilege is exercised among corporate affiliates;

(e)
Contracts offered by "Service members'
Group Life Insurance" (SGLI) or "Veterans' Group Life Insurance" (VGLI), as
authorized by 38 U.S.C. sections 1965 to 1979;

(f)
Life insurance contracts offered through
or by a non-profit military association, qualifying under section 501(c)(23) of
the "Internal Revenue Code" (IRC), and which are not underwritten by an
insurer; or

(i)
An employee pension or welfare
benefit plan that is covered by the "Employee Retirement and Income Security
Act" (ERISA);

(ii)
A plan described
by section 401(a), 401(k), 403(b), 408(k) or 408(p) of the IRC, as amended, if
established or maintained by an employer;

(iii)
A government or church plan defined in
section 414 of the IRC, a government or church welfare benefit plan, or a
deferred compensation plan of a state or local government or tax exempt
organization under section 457 of the IRC;

(iv)
A nonqualified deferred compensation
arrangement established or maintained by an employer or plan sponsor;

(v)
Settlements of or assumptions of
liabilities associated with personal injury litigation or any dispute or claim
resolution process; or

(2)
Nothing herein shall be construed to
abrogate the ability of nonprofit organizations (and/or other organizations) to
educate members of the "United States Armed Forces" in accordance with
"Department of Defense DoD Instruction 1344.07 - Personal Commercial
Solicitation on DoD Installations" or successor directive.

(3)
For purposes of this rule, general
advertisements, direct mail and internet marketing shall not constitute
"solicitation." Telephone marketing shall not constitute "solicitation"
provided the caller explicitly and conspicuously discloses that the product
concerned is life insurance and makes no statements that avoid a clear and
unequivocal statement that life insurance is the subject matter of the
solicitation. However, nothing in this subdivision shall be construed to exempt
an insurer or insurance agent from this rule in any in-person, face-to-face
meeting established as a result of the "solicitation" exemptions identified in
this subdivision.

(1)
"Active duty" means full-time duty in the
active military service of the United States and includes members of the
reserve component (national guard and reserve) while serving under published
orders for active duty or full-time training and all service in the uniformed
services under the "Uniformed Services Employment and Reemployment Rights Act"
(USERRA). The term does not include members of the reserve component who are
performing active duty or active duty for training under military calls or
orders specifying periods of fewer than thirty-one calendar days.

(2)
"Department of Defense (DoD) Personnel"
means all active duty service members and all civilian employees, including
nonappropriated fund employees and special government employees, of the
"Department of Defense."

(3)
"Door
to door" means a solicitation or sales method whereby an insurance agent
proceeds randomly or selectively from household to household without prior
specific appointment.

(4)
"General
advertisement" means an advertisement having as its sole purpose the promotion
of the reader's or viewer's interest in the concept of insurance, or the
promotion of the insurer or the insurance agent.

(5)
"Insurer" means an insurance company
required to be licensed under the laws of this state to provide life insurance
products, including annuities.

(6)
"Insurance agent" means a person required to be licensed under the laws of this
state to sell, solicit or negotiate life insurance, including
annuities.

(7)
"Known" or
"Knowingly" means, depending on its use herein, the insurance agent or insurer
had actual awareness, or in the exercise of ordinary care should have known, at
the time of the act or practice complained of, that the person solicited:

(8)
"Life
insurance" means insurance coverage on human lives including benefits of
endowment and annuities, and may include benefits in the event of death or
dismemberment by accident and benefits for disability income and, unless
otherwise specifically excluded, includes individually issued
annuities.

(9)
"Military
installation" means any state or federally owned, leased, or operated base,
reservation, post, camp, building, or other facility to which service members
are assigned for duty, including barracks, transient housing, and family
quarters.

(10)
"My Pay" is a
"Defense Finance and Accounting Service" (DFAS) web-based system that enables
service members to process certain discretionary pay transactions or provide
updates to personal information data elements without using paper
forms.

(11)
"Service in the
uniformed services" and "uniformed services" have the same meanings as in the
"Uniformed Services Employment and Reemployment Rights Act of 1994," 108 Stat.
3149, 38 U.S.C. § 4303, as amended, June 5, 2001.

(12)
"Service member" means any active duty
officer (commissioned and warrant) or enlisted member of the United States
armed forces.

(13)
"Side fund"
means a fund or reserve that is part of or otherwise attached to a life
insurance policy (excluding individually issued annuities) by rider,
endorsement or other mechanism, which accumulates premium or deposits, with
interest, or by other means. The term does not include:

(a)
Accumulated value or cash value or
secondary guarantees provided by a universal life policy;

(b)
Cash values provided by a whole life
policy which are subject to standard nonforfeiture laws for life insurance;
or

(14)
"Specific appointment" means a
prearranged appointment agreed upon by both parties and definite as to place
and time.

(15)
"United States Armed
Forces" means all components of the army, navy, air force, marine corps, and
coast guard.

(G)
Practices declared false, misleading, deceptive or unfair on a military
installation

(1)
The following acts or practices, when
committed on a military installation by an insurer or insurance agent with
respect to the in-person, face-to-face solicitation of life insurance, are
declared to be false, misleading, deceptive or unfair:

(a)
Knowingly soliciting the purchase of any
life insurance product "door to door" or without first establishing a specific
appointment for each meeting with the prospective purchaser.

(b)
Soliciting service members in a group or
"mass" audience or in a "captive" audience where attendance is not voluntary.

(c)
Knowingly making appointments
with or soliciting service members during their normally scheduled duty
hours.

(d)
Making appointments with
or soliciting service members in barracks, day rooms, unit areas, or transient
personnel housing or other areas where the installation commander has
prohibited solicitation.

(e)
Soliciting the sale of life insurance without first obtaining permission from
the installation commander or the commander's designee.

(g)
Failing to
present "DD Form 2885, Personal Commercial Solicitation Evaluation," to service
members solicited or encouraging service members solicited not to complete or
submit a "DD Form 2885."

(h)
Knowingly accepting an application for life insurance or issuing a policy of
life insurance on the life of an enlisted member of the United States armed
forces without first obtaining, for the insurer's files, a completed copy of
any required form which confirms that the applicant has received counseling or
fulfilled any other similar requirement for the sale of life insurance
established by rules or directives of the "DoD" or the rules or directives of
any branch of the armed forces.

(2)
The following acts or practices when
committed on a military installation by an insurer or insurance agent
constitute corrupt practices, improper influences or inducements and are
declared to be false, misleading, deceptive or unfair:

(a)
Using "DoD" personnel, directly or
indirectly, as a representative or agent in any official or business capacity,
with or without compensation, with respect to the solicitation or sale of life
insurance to service members.

(b)
Using an insurance agent to participate in any United States armed forces
sponsored education or orientation program.

(1)
The following acts or practices by an
insurer or insurance agent constitute corrupt practices, improper influences or
inducements and are declared to be false, misleading, deceptive or unfair:

(a)
Submitting, processing or assisting in
the submission or processing of any allotment form or similar device used by
the United States armed forces to direct a service member's pay to a third
party for the purchase of life insurance. The foregoing includes, but is not
limited to, using or assisting in using a service member's "MyPay" account or
other similar internet or electronic medium for such purposes. This paragraph
does not prohibit assisting a service member by providing insurer or premium
information necessary to complete any allotment form.

(b)
Knowingly receiving funds from a service
member for the payment of premium from a depository institution with which the
service member has no formal banking relationship. For purposes of this rule, a
"formal banking relationship" is established when the depository institution:

(i)
Provides the service member a deposit
agreement and periodic statements and makes the disclosures required by the
"Truth in Savings Act," 12 U.S.C. sections 4301 to 4313 (1992) and the rules
promulgated thereunder; and

(ii)
Permits the service member to make deposits and withdrawals unrelated to the
payment or processing of insurance premiums.

(c)
Employing any device or method or
entering into any agreement whereby funds received from a service member by
allotment for the payment of insurance premiums are identified on the service
member's "Leave and Earnings Statement" or equivalent or successor form as
"savings" or "checking" and where the service member has no formal banking
relationship as defined in paragraph (H)(1)(b) of this rule.

(d)
Entering into any agreement with a
depository institution for the purpose of receiving funds from a service member
whereby the depository institution, with or without compensation, agrees to
accept direct deposits from a service member with whom it has no formal banking
relationship as defined in paragraph (H)(1)(b) of this rule.

(e)
Using "DoD" personnel, directly or
indirectly, as a representative or agent in any official or unofficial capacity
with or without compensation with respect to the solicitation or sale of life
insurance to service members who are junior in rank or grade, or to the family
members of such personnel.

(f)
Offering or giving anything of value, directly or indirectly, to "DoD"
personnel to procure their assistance in encouraging, assisting or facilitating
the solicitation or sale of life insurance to another service member.

(g)
Knowingly offering or giving anything of
value to a service member with a pay grade of E-4 or below for his or her
attendance to any event where an application for life insurance is
solicited.

(h)
Advising a service
member with a pay grade of E-4 or below to change his or her income tax
withholding or State of legal residence for the sole purpose of increasing
disposable income to purchase life insurance.

(2)
The following acts or practices by an
insurer or insurance agent lead to confusion regarding source, sponsorship,
approval or affiliation and are declared to be false, misleading, deceptive or
unfair:

(a)
Making any representation, or
using any device, title, descriptive name or identifier that has the tendency
or capacity to confuse or mislead a service member into believing that the
insurer, insurance agent or product offered is affiliated, connected or
associated with, endorsed, sponsored, sanctioned or recommended by the U.S.
government, the "United States Armed Forces," or any state or federal agency or
government entity. Examples of prohibited insurance agent titles include, but
are not limited to, "Battalion Insurance Counselor," "Unit Insurance Advisor,"
"Servicemen's Group Life Insurance Conversion Consultant" or "Veteran's
Benefits Counselor."

Nothing herein shall be construed to prohibit a person from
using a professional designation awarded after the successful completion of a
course of instruction in the business of insurance by an accredited institution
of higher learning. Such designations include, but are not limited to,
"Chartered Life Underwriter" (CLU), "Chartered Financial Consultant" (ChFC),
"Certified Financial Planner" (CFP), "Master of Science In Financial Services"
(MSFS), or "Masters of Science Financial Planning" (MS).

(b)
Soliciting the purchase of any life
insurance product through the use of or in conjunction with any third party
organization that promotes the welfare of or assists members of the United
States armed forces in a manner that has the tendency or capacity to confuse or
mislead a service member into believing that either the insurer, insurance
agent or insurance product is affiliated, connected or associated with,
endorsed, sponsored, sanctioned or recommended by the U.S. government, or the
United States armed forces.

(3)
The following acts or practices by an
insurer or insurance agent lead to confusion regarding premiums, costs or
investment returns and are declared to be false, misleading, deceptive or
unfair:

(a)
Using or describing the credited
interest rate on a life insurance policy in a manner that implies that the
credited interest rate is a net return on premium paid.

(b)
Excluding individually issued annuities,
misrepresenting the mortality costs of a life insurance product, including
stating or implying that the product "costs nothing" or is "free."

(4)
The following acts or
practices by an insurer or insurance agent regarding SGLI or VGLI are declared
to be false, misleading, deceptive or unfair:

(a)
Making any representation regarding the
availability, suitability, amount, cost, exclusions or limitations to coverage
provided to a service member or dependents by SGLI or VGLI, which is false,
misleading or deceptive.

(b)
Making
any representation regarding conversion requirements, including the costs of
coverage, or exclusions or limitations to coverage of SGLI or VGLI to private
insurers, which is false, misleading or deceptive.

(c)
Suggesting, recommending or encouraging a
service member to cancel or terminate his or her SGLI policy or issuing a life
insurance policy which replaces an existing SGLI policy unless the replacement
shall take effect upon or after the service member's separation from the United
States armed forces.

(5)
The following acts or practices by an insurer and or insurance agent regarding
disclosure are declared to be false, misleading, deceptive or unfair:

(a)
Deploying, using or contracting for any
lead generating materials designed exclusively for use with service members
that do not clearly and conspicuously disclose that the recipient will be
contacted by an insurance agent, if that is the case, for the purpose of
soliciting the purchase of life insurance.

(b)
Failing to disclose that a solicitation
for the sale of life insurance will be made when establishing a specific
appointment for an in-person, face-to-face meeting with a prospective
purchaser.

(c)
Excluding
individually issued annuities, failing to clearly and conspicuously disclose
the fact that the product being sold is life insurance.

(d)
Failing to make, at the time of sale or
offer to an individual known to be a service member, the written disclosures
required by section 10 of the "Military Personnel Financial
Services Protection Act," Pub. L. No. 109-290, p.16 or as
amended.

(e)
Excluding individually
issued annuities, when the sale is conducted in-person face-to-face with an
individual known to be a service member, failing to provide the applicant at
the time the application is taken:

(i)
An
explanation of any free look period with instructions on how to cancel if a
policy is issued; and

(ii)
Either a
copy of the application or a written disclosure. The copy of the application or
the written disclosure shall clearly and concisely set out the type of life
insurance, the death benefit applied for and its expected first year cost. A
basic illustration that meets the requirements of rule
3901-6-04 of the Administrative Code shall be deemed
sufficient to meet this requirement for a written disclosure.

(6)
The following acts
or practices by an insurer or insurance agent with respect to the sale of
certain life insurance products are declared to be false, misleading, deceptive
or unfair:

(a)
Excluding individually issued
annuities, recommending the purchase of any life insurance product, which
includes a side fund, to a service member in pay grades E-4 and below unless
the insurer has reasonable grounds for believing that the life insurance death
benefit, standing alone, is suitable.

(b)
Offering for sale or selling a life
insurance product, which includes a side fund, to a service member in pay
grades E-4 and below who is currently enrolled in SGLI, is presumed unsuitable
unless, after the completion of a needs assessment, the insurer demonstrates
that the applicant's SGLI death benefit, together with any other military
survivor benefits, savings and investments, survivor income, and other life
insurance, are insufficient to meet the applicant's insurable needs for life
insurance.

(i)
"Insurable needs" are the
risks associated with premature death taking into consideration the financial
obligations and immediate and future cash needs of the applicant's estate
and/or survivors or dependents.

(c)
Excluding individually issued annuities,
offering for sale or selling any life insurance contract which includes a side
fund:

(i)
Unless interest credited accrues
from the date of deposit to the date of withdrawal and permits withdrawals
without limit or penalty;

(ii)
Unless the applicant has been provided with a schedule of effective rates of
return based upon cash flows of the combined product. For this disclosure, the
effective rate of return will consider all premiums and cash contributions made
by the policyholder and all cash accumulations and cash surrender values
available to the policyholder in addition to life insurance coverage. This
schedule will be provided for at least each policy year from one to ten and for
every fifth policy year thereafter, ending at age one hundred, policy maturity
or final expiration; and

(iii)
Which, by default, diverts or transfers funds accumulated in the side fund to
pay, reduce or offset any premiums due.

(d)
Excluding individually issued annuities,
offering for sale or selling any life insurance contract which, after
considering all policy benefits, including but not limited to endowment, return
of premium or persistency, does not comply with standard nonforfeiture law for
life insurance.

(e)
Selling any
life insurance product to an individual known to be a service member that
excludes coverage if the insured's death is related to war, declared or
undeclared, or any act related to military service except for an accidental
death coverage, e.g., double indemnity, which may be excluded.

If any paragraph, term or
provision of this rule is adjudged invalid for any reason, the judgment shall
not affect, impair or invalidate any other paragraph, term or provision of this
rule, but the remaining paragraphs, terms and provisions shall be and continue
in full force and effect.

The purpose of this rule is to implement division
(A)(24) of section 3929.01 of the Revised Code, as
it pertains to the writing and servicing of that kind of insurance known as
mortgage guaranty insurance as hereinafter defined.

(a)
Insurance against financial loss by reason of nonpayment of principal, interest
or other sums agreed to be paid under the terms of any note or bond or other
evidence of indebtedness secured by a mortgage, deed of trust, or other
instrument constituting a lien or charge on real estate, provided the
improvement on such real estate is a residential building or a condominium unit
or buildings designed for occupancy by not more than four families; or

(b)
Insurance against financial
loss by reason of nonpayment of principal, interest or other sums agreed to be
paid under the terms of any note or bond or other evidence of indebtedness
secured by a mortgage, deed of trust or other instrument constituting a lien or
charge on real estate, providing the improvement on such real estate is a
building or buildings designed for occupancy by five or more families or
designed to be occupied for industrial or commercial purposes; or

(c)
Insurance against financial loss by
reason of nonpayment of rent or other sums agreed to be paid under the terms of
a written lease for the possession, use or occupancy of real estate, provided
the improvement on such real estate is a building or buildings designed to be
occupied for industrial or commercial purposes.

(2)
"Authorized real estate security" for the
purpose of this rule means a note, bond or other evidence of indebtedness, not
exceeding one-hundred and three per cent of the lower of the fair value as
fixed by appraisal or purchase price of the real estate, secured by a mortgage,
deed of trust, or other instrument which constitutes, or is equivalent to, a
first lien or charge on real estate, provided:

(a)
Any percentage in excess of one-hundred
per cent is used only for closing costs.

(b)
The real estate loan secured in such
manner is one of a type which:

(ii)
A building and loan
association, federal savings and loan, or a service corporation of either, or

(iii)
An insurance company, which
is supervised and regulated by a department of the state of Ohio or an agency
of the federal government, is authorized to make, or would be authorized to
make, disregarding any requirement applicable to such an institution that the
amount of the loan not to exceed a certain percentage of the value of the real
estate.

(c)
The
improvement on such real estate is a building or buildings designed for
occupancy as specified by paragraphs (C)(1)(a) and (C)(1)(b) of
this rule.

(d)
The lien on such
real estate may be subject to and subordinate to the following:

(i)
The lien on any public bond, assessment
or tax, when no installment, call or payment of or under such bond, assessment
or tax is delinquent.

(ii)
Outstanding mineral, oil, water or timber rights, rights-of-way, easements or
rights-of-way of support, sewer rights, building restrictions or other
restrictions or covenants, conditions or regulations of use, or outstanding
leases upon such real property under which rents or profits are reserved to the
owner thereof.

(3)
"Contingency reserve" means an additional
premium reserve established to protect policyholders against the effect of
adverse economic cycles.

A mortgage guaranty insurance company shall not transact the
business of mortgage guaranty insurance in the state of Ohio unless: if a stock
insurance company, it has capital and surplus in the aggregate amount of not
less than two million five hundred thousand dollars, which aggregate shall
include paid-in capital of not less than one million and contributed surplus of
not less than one million or if a mutual insurance company, a minimum surplus
of two million five hundred thousand dollars.

(1)
Mortgage guaranty insurance may be
transacted in this state by insurers fulfilling the requirements of paragraph
(E)(6)
of this rule and holding a certificate of authority for the transaction of such
insurance pursuant to Title XXXIX of the Revised Code and shall be written only
to insure loans secured by authorized real estate securities as defined in
paragraph (C)(2) of this rule.

(a)
A mortgage guaranty insurance company
shall not insure loans secured by a single risk in excess of ten per cent of
the company's aggregate capital, surplus and contingency reserve.

(b)
No mortgage guaranty insurance company
shall have more than twenty per cent of its total insurance in force in any one
standard metropolitan statistical areas ("SMSA") as defined by the United
States department of commerce.

No mortgage guaranty insurance company or any agent or
representative of a mortgage guaranty insurance company shall prepare or
distribute or assist in preparing or distributing any brochure, pamphlet,
report or any form of advertising to the effect that the real estate
investments of any financial institution are "insured investments," unless the
brochure, pamphlet, report or advertising clearly states that the loans are
insured by mortgage guaranty insurance companies authorized to transact the
business of mortgage guaranty insurance in the state of Ohio or are insured by
an agency of the federal government, as the case may be.

A mortgage guaranty insurance company shall not invest in
notes or other evidences of indebtedness secured by a mortgage or other lien
upon real property. This section shall not apply to obligations secured by real
property or contracts for the sale of real property, which obligations or
contracts of sale are acquired in the course of the good faith settlement of
claims under policies of insurance issued by the mortgage guaranty insurance
company, or in the good faith disposition of real property so acquired.

A mortgage guaranty insurance company shall limit its
coverage, with respect to any one authorized real estate security, net of
reinsurance, ceded to a reinsurer unaffiliated with the company or an
affiliated reinsurer which does not own, and is not owned by, in whole or in
part, the ceding mortgage guaranty insurer, to a maximum of twenty-five per
cent of the entire indebtedness to the insured under that authorized real
estate security. In lieu thereof, a mortgage guaranty insurance company may
elect to pay the entire indebtedness to the insured and acquire title to the
authorized real estate security.

(a)
A mortgage guaranty insurance company
which anywhere transacts any class of insurance other than mortgage guaranty
insurance is not eligible to transact mortgage guaranty insurance in the state
of Ohio.

(b)
A mortgage guaranty
insurance company which anywhere transacts the classes of insurance defined in
paragraph (C)(1)(b) or (C)(1)(c) of this rule may not transact
in the state of Ohio the class of mortgage guaranty insurance defined in
paragraph (C)(1)(a) of this rule, provided, however, a mortgage
guaranty insurance company which transacts a class of insurance defined in
paragraph (C)(1)(a) of this rule may write up to five per cent
of its insurance in force on residential property designed for occupancy by
five or more families.

(a)
Nothing in this rule shall be construed
as limiting the right of any mortgage guaranty insurance company to impose
reasonable requirements upon the lender with regard to the terms of any note or
bond or other evidence of indebtedness secured by a mortgage or deed of trust,
such as requiring a stipulated down payment by the borrower.

(b)
No mortgage guaranty insurance company
may discriminate in the issuance or extension of mortgage guaranty insurance on
the basis of sex, marital status, race, color, creed, national origin, physical
handicap or mental handicap.

(c)
No policy of mortgage guaranty insurance, excluding policies of reinsurance,
shall be written unless and until the insurer itself or the lender, in
compliance with underwriting directives from the insurer and subject to
periodic underwriting audits by the insurer, shall have conducted a reasonable
and thorough examination of the evidence supporting credit worthiness of the
borrower and the appraisal report reflecting market evaluation of the property
and shall have determined that prudent underwriting standards have been met.

(a)
All policy forms and
endorsements, and rates to be charged and the premium including all
modifications of rates and premiums to be paid by the policyholder shall be
filed with and subject to the provisions of sections
3937.01 to
3937.18 of the Revised Code.
With respect to owner-occupied, single-family dwellings or owner-occupied two
family dwellings, the mortgage guaranty insurance policy shall provide that the
borrower shall not be liable to the insurance company for any deficiency
arising from a foreclosure sale.

(b)
Every mortgage guaranty insurance company
shall adopt, print and make available a schedule of premium charges for
mortgage guaranty insurance policies. Premium charges made in conformity with
the provisions of this rule shall not be deemed to be of interest or other
charges under any other provision of law limiting interest or other charges in
connection with mortgage loans. The schedule shall show the entire amount of
premium charge for each type of mortgage guaranty insurance policy issued by
the insurance company.

(a)
A mortgage
guaranty insurance company shall not at any time have outstanding a total
liability, net of reinsurance, under its aggregate mortgage guaranty insurance
policies exceeding twenty-five times its capital, surplus and contingency
reserve. In the event that any mortgage guaranty insurance company has
outstanding total liability exceeding twenty-five times its capital, surplus
and contingency reserve, it shall cease transacting new mortgage guaranty
business until such time as its total liability no longer exceeds twenty-five
times its capital, surplus and contingency reserve.

(b)
The
superintendent, in the superintendent's sole discretion, may permit a temporary
exception to the requirement set out in paragraph (E)(9)(a) of this rule at the
written request of a mortgage guaranty insurer upon a finding that the mortgage
guaranty insurer's policyholders position is reasonable in relationship to the
mortgage guaranty insurer's aggregate insured risk and adequate to its
financial needs. The request must be made in writing at least ninety days in
advance of the date that the mortgage guaranty insurer expects to exceed the
requirements of paragraph (E)(9)(a) of this rule and shall, at a minimum,
address the factors specified in paragraph (E)(9)(c) of this rule, provided,
however, that a mortgage guaranty insurance company may submit a request for
such exception within ten days after the effective date of this rule as amended
and shall be deemed to have complied with the ninety day requirement in
paragraph (E)(9)(b) of this rule.

(c)
In determining
whether a mortgage guaranty insurer's policyholders position is reasonable in
relation to the mortgage guaranty insurer's aggregate insured risk and adequate
to its financial needs, the superintendent shall consider all of the
following:

(i)
The size of the
mortgage guaranty insurer as measured by its assets, capital and surplus,
reserves, premium writings, insurance in force and other criteria as deemed
appropriate by the superintendent.

(ii)
The extent to
which the mortgage guaranty insurer's business is diversified across time,
geography, credit quality, origination, and distribution channels.

(iii)
The
nature and extent of the mortgage guaranty insurer's reinsurance program.

(iv)
The
quality, diversification, and liquidity of the mortgage guaranty insurer's
assets and its investment portfolio.

(v)
The historical
and forecasted trend in the size of the mortgage guaranty insurer's
policyholder's position.

(vi)
The
policyholder's position maintained by other comparable mortgage guaranty
insurers in relation to the nature of their respective insured risks.

(viii)
The quality
and liquidity of investments in affiliates. The superintendent may treat any
such investment as a non-admitted asset for purposes of determining the
adequacy of surplus as regards policyholders.

(ix)
The quality of
the mortgage guaranty insurer's earnings and the extent to which the reported
earnings of the mortgage guaranty insurer include extraordinary items.

(x)
An
independent actuary's opinion as to the reasonableness and adequacy of the
mortgage guaranty insurer's historical and projected policyholder
position.

(xi)
The capital contributions which have been infused or
are available for future infusion into the mortgage guaranty insurer.

(xii)
The
historical and projected trends in the components of the mortgage guaranty
insurer's aggregate insured risk, including, but not limited to, the quality
and type of the risks included in the aggregate insured risk.

(d)
The
superintendent may retain accountants, actuaries, or other experts to assist
the superintendent in the review of the mortgage guaranty insurer's request
submitted pursuant to paragraph (E)(9)(b) of this rule. The mortgage guaranty
insurer shall bear the cost of retaining such experts.

(e)
Any waiver shall
be for a specified time, not to exceed two years and shall be subject to any
terms and conditions imposed by the superintendent, in the superintendent's
sole discretion. The superintendent shall not grant a waiver that extends
beyond October 1, 2014.

Any mortgage guaranty insurance company which receives five
per cent or more of its net annual premium from policies written to insure
loans secured by authorized real estate securities having a greater than
ninety-five per cent loan-to-value ratio shall notify the superintendent within
thirty days. The superintendent may, if the superintendent finds that further
underwriting of loans having a greater than ninety-five per cent loan-to-value
ratio would have an adverse impact on the solvency of the company, prohibit the
company from further underwriting such loans.

(a)
A mortgage guaranty insurance company
shall not pay or cause to be paid either directly or indirectly, to any owner,
purchaser, lessor, lessee, mortgagee or prospective mortgagee of the real
property which secures the authorized real estate security or which is the fee
of an insured lease, or any interest therein, or any person who is acting as an
agent, representative, attorney or employee of such owner, purchaser or
mortgagee, any commission, or any part of its premium charges or any other
consideration as an inducement for or as compensation on any mortgage guaranty
insurance business.

(b)
In
connection with the placement of any mortgage guaranty insurance, a mortgage
guaranty insurance company shall not cause or permit any commission, fee,
remuneration, or other compensation to be paid to, or received by, any insured
lender or lessor; any subsidiary or affiliate of any insured; any officer,
director or employee of any insured or any member of their immediate family;
any corporation, partnership, trust, trade association in which any insured or
any such officer, director, or employee or member of their immediate family has
a financial interest; or any designee, trust, nominee, or other agent or
representative of any of the foregoing.

(c)
No mortgage guaranty insurance company
shall make any rebate of any portion of the premium charge shown by the
schedule required by paragraph (E)(8)(b) of this rule. No mortgage guaranty
insurance company shall quote any rate or premium charge to any person which is
different than that currently available to others for the same type of
coverage. The amount by which any premium charge is less than that called for
by the current schedule of premium charges is an unlawful rebate.

(a)
If a member of a holding company system,
a mortgage guaranty insurance company licensed to transact business in this
state shall not knowingly underwrite mortgage guaranty insurance on mortgages
originated by the holding company system or an affiliate or on mortgages
originated by any mortgage lender to which credit is extended, directly or
indirectly, by the holding company system or any affiliate unless such
insurance is underwritten on the same basis, for the same consideration and
subject to the same insurability requirements as insurance provided to
nonaffiliated lenders.

(i)
Any mortgage
guaranty insurance company which receives, in the aggregate, twenty
per
cent of more of its net annual premium from policies written to insure
mortgages originated by affiliates in the holding company system shall,
concurrent with the filing of its annual statement, notify the superintendent
of that fact.

(ii)
The
superintendent may, if the superintendent finds that further
underwriting of policies issued on said loans would have an adverse impact on
the solvency of the company, prohibit the mortgage guaranty insurance company
for further underwriting such loans.

(b)
A mortgage guaranty insurance company,
the holding company system of which it is a part or any affiliate shall not pay
any commission, remuneration, rebates or engage in activities proscribed in
paragraph (F)(1) of this rule.

A mortgage guaranty insurance company shall compute and
maintain adequate case basis and other loss reserves which accurately reflect
loss frequency and loss severity and shall include components for claims
reported and unpaid, and for claims incurred but not reported, including
estimated losses on:

(a)
Insured
loans which have resulted in the conveyance of property which remains unsold;

Each mortgage guaranty insurance company shall establish a
contingency reserve out of net premiums remaining (gross premiums less premiums
returned to policyholders net of reinsurance) after establishment of the
unearned premium reserve. The mortgage guaranty insurance company shall
contribute to the contingency reserve an amount equal to fifty per cent of such
remaining earned premiums. Contributions to the contingency reserve made during
each calendar year shall be maintained for a period of one hundred twenty
months, except that withdrawals may be made by the company in any year in which
the actual incurred losses exceed thirty-five per cent of the corresponding
earned premiums, and no such releases shall be made without prior approval by
the superintendent of the insurance company's state of domicile. If the
coverage provided in this rule exceeds the limitations set forth herein, the
superintendent of insurance shall establish a rate formula factor that will
produce a contingency reserve adequate for the added risk assumed. The face
amount of an insured mortgage shall be computed before any reduction by the
mortgage guaranty insurance company's election to limit its coverage to a
portion of the entire indebtedness.

Whenever a mortgage guaranty insurance company obtains
reinsurance from an insurance company which is properly licensed to provide
such reinsurance or from an appropriate governmental agency, the mortgage
guaranty insurer and the reinsurer shall establish and maintain the reserves
required in this rule in appropriate proportions in relation to the risk
retained by the original insurer and ceded to the assuming reinsurer so that
the total reserves established shall not be less than the reserves required by
this rule.

(1)
Whenever the laws of any other
jurisdiction in which a mortgage guaranty insurance company subject to the
requirement of this rule is also licensed to transact mortgage guaranty
insurance require a larger unearned premium reserve or contingency reserve in
the aggregate than that set forth herein, the establishment of such larger
unearned premium reserve or contingency reserve in the aggregate shall be
deemed to be in compliance with this rule.

(2)
Unearned premium reserves and contingency
reserves shall be computed and maintained on risks insured after the effective
date of this rule as required by paragraphs (G)(1) and (G)(3) of this
rule. Unearned premium reserves and contingency reserves on risks insured
before the effective date of this rule may be computed and maintained as
required previously.

If any paragraph, term or provision of
this rule is adjudged invalid for any reason, the judgment shall not affect,
impair or invalidate any other paragraph, term or provision of this rule, but
the remaining paragraph, term or provision shall be and continue in full force
and effect.

The purpose of this rule is to protect
the interests of debtors and the public in Ohio by providing a framework for
the transaction of credit life and credit accident and health insurance that
ensures a complicated product is carefully and thoughtfully constructed and
administered.

This rule is issued pursuant to Chapter 3918. of the Revised
Code regulating credit life insurance and credit accident and health insurance
and is applicable to all policies, riders, applications for insurance, notices
of proposed insurance, certificates of insurance and endorsements providing
credit life insurance and credit accident and health insurance issued or
renewed on or after November 1, 1983 in the state of Ohio.

Certificates, notices of proposed insurance and premium rates
applicable in connection with existing group policies of credit insurance shall
be conformed to the requirements of this rule not later than the anniversary
date of the group policy next following the effective date of this rule.

No existing group credit life or group credit accident and
health policy presently in force in Ohio will be rewritten or redated so as to
delay or avoid the effect of this rule.

Any policy issued to replace an existing policy of credit
insurance or any amendment to any existing policy of credit insurance shall be
ignored for the purpose of determining the anniversary if such change is made
after July 1, 1983.

Section
3918.07 of the Revised Code
provides that all policies, certificates of insurance, notices of proposed
insurance, applications for insurance, endorsements and riders providing
coverage on residents of Ohio shall be filed with the superintendent of
insurance and that he may disapprove any such form.

(1)
No individual or group policy of credit
life insurance or credit accident and health insurance shall be issued for
delivery in this state, and no application, binder, endorsement, rider,
certificate of group insurance, notice of proposed insurance, or other form
pertaining to credit life insurance or credit accident and health insurance
under such policy shall be issued for delivery or used in this state, on or
after the effective date of this rule unless such forms and the premium rates
and refund formulas therefor have been filed with the superintendent of
insurance and approved prior to such issuance or use and have not been
subsequently disapproved in accordance with division (B) of section
3918.07 of the Revised
Code.

(2)
If a group policy of
credit life insurance or credit accident and health insurance:

(a)
Has been delivered in this state before
the effective date of this rule, or

(b)
Delivered in another state before or
after the effective date of this rule-

The insurer shall be required to file only the group
certificate and notice of proposed insurance as specified in divisions (B) and
(D) of section 3918.06 of the Revised Code and
such forms shall be approved by the superintendent if they conform with the
requirements of Chapter 3918. of the Revised Code and this rule, and if the
schedules of premium rates applicable to the insurance evidenced by such
certificate or notice are not in excess of the standards set forth in this
rule. Provided, however, the premium rate in effect on existing group policies
may be continued until the first policy anniversary date following the
effective date of this rule.

(3)
Division (D) of section
3918.06 of the Revised Code
provides that the copy of the application for, or notice of, proposed insurance
shall be separate and apart from the credit instrument unless the information
required "is prominently set forth therein." The copy of the application for,
or notice of, proposed insurance shall be deemed to be prominently set forth in
the credit instrument if set forth in a separate provision on the face or
reverse in type at least equal in size and prominence to the type used for the
other provisions; provided that if the same is set forth on the reverse of the
credit instrument, reference shall be made on the face of the instrument and
provided further that the name of the debtor proposed for insurance, any
figures relating to the amount and term of coverage, and the rate of amount of
payment for insurance by the debtor need not be contained in a separate
provision of the instrument, but may be set forth elsewhere in the
instrument.

(a)
The disclosure required by paragraph
(D)(3)
of this rule shall be made to the debtor at the time of the debtor's
application for credit life or credit accident and health insurance (excluding
non-contributory insurance) in connection with a credit transaction, and before
the debtor becomes obligated to purchase such insurance.

(b)
The form(s) containing the disclosure
shall be filed with the superintendent of insurance and the disclosure language
shall be subject to disapproval pursuant to section
3918.07 of the Revised
Code.

(c)
Additional disclosure
shall be made using the exact form set forth in appendix I to this
rule.

(5)
If a creditor
makes available to the debtors, more than one plan of credit life insurance or
more than one plan of credit accident and health insurance, all debtors must be
informed of all such plans applicable to the type of loan.

Where rate filings are made in accordance with the premium
rate standards, outlined in this paragraph of this rule, the filed rates shall
prima facie be deemed, not to be excessive in relation to the benefits
provided.

It is presumed that the premium rate for credit life insurance,
for which premiums are paid monthly on outstanding balances, is not excessive
in relation to the benefits provided if the monthly premium rate for such
coverage does not exceed 0.846 dollars per one thousand dollars of outstanding
balance of insured indebtedness.

(b)
Prima facie single premium rate for
decreasing term credit life insurance:

It is presumed that the single premium rate for decreasing term
credit life insurance for which premiums are paid in one sum for the entire
duration of indebtedness, is not excessive in relation to the benefits provided
if the single premium rate for such insurance does not exceed a rate of
fifty-five cents per one hundred dollars repayable in twelve substantially
equal monthly installments and, for other repayment periods, the equivalent
single premium rates calculated according to the formula SPn = (n + 1)/20 times
the monthly outstanding balance premium rate standard from paragraph
(E)(1)(a) of this rule, where "n" is equal to the
number of monthly payments, and "SPn" is the single premium rate per one
hundred dollars repayable in "n" monthly installments.

(c)
As an alternative to the standards set
forth above, an insurer may, where age data applicable to the insured persons
are available, determine premium rates based on such age data and computed in a
manner consistent herewith, subject to approval pursuant to section
3918.07 of the Revised
Code.

(d)
Standards for premium
rates for indebtedness repayable in installments other than as indicated in
paragraph (E)(1) of this rule shall be the equivalent of these
standards.

(e)
Other additional
benefits to policyholders and their debtors, (i.e. dismemberment, partial
disability, total and permanent disability, and suicide) may be provided by the
insurance carriers if they so desire, but in no event may the charge for such
coverage be passed on to the debtor so as to increase the total rate to exceed
the rate established by this rule. If a suicide exclusion is utilized, such
exclusion cannot be effective for more than six months following the effective
date of coverage for that insured person.

(f)
The foregoing rate standards may be used
for credit life insurance with or without age limitations. If an age limitation
is provided, it may not be more restrictive than to exclude from coverage any
debtor who has attained age sixty-five at incurral of indebtedness, or who will
have attained age sixty-six at maturity of the indebtedness.

(g)
A policy provision that restricts
coverage based on age in accordance with paragraph (E)(1)(c) or (E)(1)(f) of this rule shall, in the
absence of misstatement, be valid only for the first sixty days of coverage.
During the first sixty days of coverage the insurer shall have the right to
cancel or restructure coverage that would otherwise provide benefits in excess
of policy age restrictions.

(h)
These standards are applicable to the type of decreasing term credit life
insurance contract customarily offered for sale protecting credit obligations
repayable in substantially equal installments. Standards for premium rates in
the case of forms which vary in any material respect from this standard type of
credit insurance contract may reflect such variations to the extent that there
is a measurable difference in the claims cost of the coverage provided and must
receive approval pursuant to section
3918.07 of the Revised Code on a
case basis.

(i)
Premium rates for
joint credit life insurance shall not exceed one and three-quarters times the
applicable single credit life rate.

(i)
In connection with loans or other credit
transactions of sixty months or less, the amount of credit life insurance shall
not exceed the scheduled or actual amount of indebtedness, whichever is
greater.

(ii)
For loans or other
credit transactions exceeding sixty months the amount of credit life insurance
shall not exceed the net indebtedness, exclusive of unearned finance
charges.

(k)
The
foregoing standards for premium rates are those to become effective November 1,
1983. Effective May 1, 1985, the monthly outstanding balance premium rate shall
not exceed eighty cents per one thousand dollars outstanding balance of insured
indebtedness and the single premium rate for decreasing term credit life
insurance for which premiums are paid in one sum for the entire duration of
indebtedness shall not exceed fifty-two cents per one hundred dollars repayable
in twelve substantially equal monthly installments. The superintendent shall
use experience data reported on the national association of insurance
commissioners (NAIC) annual statement credit insurance experience exhibit to
adjust the prima facie rates for credit life insurance on an industry-wide
basis as necessary to establish and maintain fifty per cent loss ratio. Prima
facie rates shall first be adjusted in like manner effective November 1, 1986,
based on the data reported the previous year, and shall be adjusted in like
manner effective November first of every year after 1986.
However, after the November 1, 2013 adjustment, prima
facie rates shall be adjusted in like manner effective January 1, 2017, based
on the data reported for the previous three years, and shall be adjusted in
like manner effective January first of every third year after two-thousand
fourteen.

(a)
If premiums are paid in one sum for the
entire duration of the indebtedness the following rates per one hundred dollars
of initial indebtedness repayable in the indicated number of equal monthly
installments are applicable:

Effective May 1, 1985, the one sum premium per one hundred
dollars of initial indebtedness shall be one hundred three per cent of the
rates listed in this paragraph of this rule. The superintendent shall use
experience data reported on the national association of insurance commissioners
(NAIC) annual statement credit insurance experience exhibit to adjust the prima
facie rates for credit accident and health insurance on an industry-wide basis
as necessary to establish and maintain a sixty per cent loss ratio. Prima facie
rates shall first be adjusted in like manner effective November 1, 1986, based
on data reported the previous year, and shall be adjusted in like manner
effective November first, of every year after 1986. However, after the November 1, 2013 adjustment, prima facie
rates shall be adjusted in like manner effective January 1, 2017, based on the
data reported for the previous three years, and shall be adjusted in like
manner effective January first of every third year after two-thousand
fourteen.

The above shows rates only for credit transactions repayable in
a total number of installments which is a multiple of six. For transactions
repayable in numbers of installments not set forth above; either the actuarial
equivalent or straight line interpolation may be utilized. The rate standards
set forth above shall be applicable for such contracts which contain a
provision excluding or denying claim for disability resulting from pre-existing
illness, disease or physical condition (whether or not by name or specific
description) which totally disabled the debtor at any time during the six-month
period immediately preceding the effective date of the debtor's coverage, or
provisions which exclude coverage for pre-existing conditions for which the
insured debtor received medical advice, diagnosis, or treatment within six
months preceding the effective date of the debtor's coverage, and which caused
loss within the six months following the effective date of coverage, but
contain no other provision which excludes or restricts liability in the event
of disability. The rate standards set forth herein may be increased ten per
cent for such contracts that do not contain a provision excluding or denying a
claim for disability resulting from pre-existing conditions.

Any contract to which the above rates apply may contain
provisions excluding or restricting coverage in the event of pregnancy,
intentionally self-inflicted injuries, foreign travel or residence, or flight
in non-scheduled aircraft, war or military service.

Any contract may also provide an age limitation, which
limitation may not be more restrictive than to exclude from coverage any debtor
who has attained age sixty-five at incurral of indebtedness, or who will have
attained age sixty-six at maturity of the indebtedness.

No contract shall provide for an actively-at-work test that
requires the debtor to be employed more than thirty hours per week.

(b)
Standards for premium rates
for indebtedness repayable in installments other than as indicated in paragraph
(E)(2)(a) of this rule shall be the equivalent of the
standards.

(c)
If premium rates are
payable other than in one sum, an insurer may determine such rates on a basis
consistent with the rates set forth in paragraph (E)(2)(a)
of this rule.

(d)
The standard for
premium rates set forth in paragraph (E)(2)(a)
of this rule is applicable to the form of credit accident and health insurance
described which is illustrative of the kind of coverage that may be issued.
This rule, however, shall not preclude an insurer from filing other forms of
credit accident and health insurance for consideration by the
superintendent.

(e)
Standards for
premium rates for contracts providing benefits on a basis different from those
illustrated above shall be the equivalent of the standard.

(f)
A policy provision that restricts
coverage based on age in accordance with paragraph (E)(2)(a)
of this rule shall, in the absence of misstatement, be valid only for the first
sixty days of coverage. During the first sixty days of coverage the insurer
shall have the right to cancel or restructure coverage that would otherwise
provide benefits in excess of policy restrictions.

Standards for premium rates for contracts combining credit
life and credit accident and health coverage in one policy shall be consistent
with the standards set forth in paragraphs (E)(1) and (E)(2) of this
rule, however, such contracts must provide for a refund of the unearned credit
accident and health premium, in the event of the debtor's death. Refunds shall
be computed from the date of death. These refunds must also be provided when
the insured debtor is covered by separate contracts providing credit life and
credit accident and health coverage.

Notwithstanding any other provision or paragraph of this rule
to the contrary, the superintendent of insurance may, after November 1, 1986,
establish minimum loss ratio percentage requirements, based upon claim
experience and expense factors, that differ from the fifty per cent standard
for credit life and sixty per cent standard for credit accident and health
coverage set forth in paragraphs (E)(1), (E)(2), and (E)(8) of
this rule.

After November 1, 1986, any insurer desiring to show cause why
its premium rates for a case or class of business should not be reduced, as set
forth in paragraphs (E)(1) and (E)(8) of this rule, must agree to an
examination and audit of it's claim experience and expense factors. The
examination and audit will be performed by qualified actuaries and accountants
selected by the superintendent of insurance. The expense of the examination and
audit will be paid for by the insurer and the insurer must agree to accept the
findings of the superintendent of insurance which will be based upon the
results of the examination and audit.

As used in connection with credit life or accident and health
insurance, the following terms shall mean:

(a)
"Claims" means benefits payable on death
or disability and does not include loss adjustment expense, claim settlement
expense or any other expense, charge, cost or payment.

(b)
"Claims incurred" means claims actually
paid during the year, plus any estimated reserves at the end of the year for
reported claims in the process of settlement, and reserves for unreported
claims, and less any estimated reserves at the end of the preceding year for
reported claims in the process of settlement and for unreported
claims.

Where premiums are payable monthly based on the outstanding
balance of insured indebtedness, "premiums earned" shall mean the total
premiums paid the insurer during the reporting year plus premiums due the
insurer but unpaid at the end of the preceding year, less the premiums due the
insurer but unpaid at the end of the current year.

Where premiums are payable in one sum for the entire duration
of indebtedness, "premiums earned" shall mean the one-sum premiums which become
due the insurer during the reporting year, plus the reserve at the beginning of
the reporting year minus the reserve at the end of the reporting year.

The premiums as defined under either system of premium payments
shall be without reduction of any kind except for premiums refunded or adjusted
on account of termination of coverage.

(d)
"Class of business" means a grouping of
businesses under the following categories, each category being referred to as a
class of business:

(6)
Life premium rate deviations Credit life insurance premium rates exceeding the
standards in paragraph (E)(1) of this rule may be approved, as not being
excessive in relation to the benefits provided, for the insurance covering the
debtors of a creditor or a class of business hereinafter called the "case," if
the credible loss ratio for the case is more than sixty per cent. For such
cases, the permissible premium rate shall be computed as follows, unless
otherwise determined by the superintendent.

(c)
If the
case is on the single premium basis, the permissible schedule of single premium
rates is obtained using the formula SPn = (n + 1)/20 times the deviated monthly
outstanding balance rate from paragraph (E)(6)(b)
of this rule, where:

"n" = the number of equal monthly payments.

"SPn" = the single premium rate per one hundred dollars for "n"
monthly payments.

(d)
The
monthly outstanding balance prima facie premium rate of 0.846 dollars per one
thousand dollars indicated in paragraph (E)(6)(a) of this rule, will reduce to
eighty cents per one thousand dollars on May 1, 1985. The 0.338 dollars per one
thousand dollars loading factor indicated in paragraph
(E)(6)(b) of this rule, will reduce to thirty-two
cents on May 1, 1985. On November 1, 1986 the monthly outstanding balance prima
facie premium rate in paragraph (E)(6)(a) of this rule will be the rate required
by paragraph (E)(1)(k) of this rule and the loading factor in
paragraph (E)(6)(b) of this rule will be forty per cent of the
outstanding balance rate.

Credibility of experience depends upon the case size. Case
size is measured according to three premium size brackets to reflect the
greater credibility of experience resulting from greater size. The premiums in
the brackets are the premiums based on the prima facie premium rate standard.
The size brackets are:

The credible experience period is three years if the case
aggregate earned premium based on the prima facie rate, developed during the
most recent three-year period is less than five hundred thousand dollars. If
the case aggregate earned premium during the most recent three-year period
based on the prima facie rate is equal to or greater than five hundred thousand
dollars, then the credible experience period is the most recent number of years
needed to accumulate five hundred thousand dollars of premium on the prima
facie rate. For example, if a case were of sufficient size to generate at least
five hundred thousand dollars in one year, the credible experience period would
be one year.

The experience used in determining the permissible rate is the
experience during the credible experience period, as follows:

The credible loss ratio is based on the experience of the
credible experience period. It is a composite of the case's actual loss ratio
(ALR) during the credible experience period and the basic loss ratio (BLR)
contemplated by the prima facie rate standards which is fifty per cent for
credit life insurance.

The actual loss ratio is the ratio of the incurred claims of
the credible experience period divided by the earned premium based on the prima
facie rate during the credible experience period.

The compositing of the actual and basic loss ratios takes
account of fluctuations about expected experience, and dampens the effect of
non-credible fluctuations. The factors used in compositing the loss ratios
depend upon case size in accordance with the three size brackets in paragraph
(E)(6)(e)(i) of this rule, as follows:

Credit accident and health insurance premium rates exceeding
the standards in paragraph (E)(2) of this rule may be approved, as not being
excessive in relation to the benefits provided, for the insurance covering the
debtors of a creditor or a class of business hereinafter called the "case," if
the credible loss ratio for the case is more than sixty per cent. For such
cases, the permissible premium rate shall be computed as follows, unless
otherwise determined by the superintendent.

(a)
Determine the credible claim cost by
multiplying the prima facie premium rate, by the case credible loss ratio,
obtained in paragraph (E)(7)(c)(iii) of this rule.

(b)
The permissible deviated outstanding
balance rate is equal to the credible monthly claim cost plus the loading
factor. The loading factor is computed as a percentage of the prima facie rate
as adjusted in accordance with the following table:

(i)
Effective November 1, 1983 - thirty-five
per cent times the prima facie rate set forth in paragraph
(E)(2)(a) of this rule;

(ii)
Effective May 1, 1985 - thirty-seven per
cent times the prima facie rate set forth in paragraph
(E)(2)(a) of this rule;

(iii)
Effective November 1, 1986 - forty per
cent times the prima facie rate set forth in paragraph
(E)(2)(a) of this rule.

Credibility of experience depends upon the case size. Case
size is measured according to three premium size brackets to reflect the
greater credibility of experience resulting from greater size. The premiums in
the brackets are the premiums based on the prima facie premium rate standard.
The size brackets are:

The credible experience period is three years if the case
aggregate earned premium based on the prima facie rate, developed during the
most recent three-year period is less than five hundred thousand dollars. If
the case aggregate earned premium during the most recent three-year period
based on the prima facie rate is equal to or greater than five hundred thousand
dollars then the credible experience period is the most recent number of years
needed to accumulate five hundred thousand dollars of premium on the prima
facie rate. For example, if a case were of sufficient size to generate at least
five hundred thousand dollars in one year, the credible experience period would
be one year.

The credible loss ratio is based on the experience of the
credible experience period. It is a composite of the case's actual loss ratio
(ALR) during the credible experience period and the basic loss ratio (BLR)
contemplated by the prima facie rate standards which is sixty per cent for
credit accident and health insurance.

The actual loss ratio is the ratio of the incurred claims of
the credible experience period divided by the earned premium based on the prima
facie rate during the credible experience period.

The compositing of the actual and basic loss ratios takes
account of fluctuations about expected experience, and dampens the effect of
non-credible fluctuations. The factors used in compositing the loss ratios
depend upon case size in accordance with the three size brackets in paragraph
(E)(7)(c)(i) of this rule, as follows:

After November 1, 1986, any insurer which produces, for a case
or class of business, as determined by the insurer, a credible loss ratio of
less than fifty per cent for life and sixty per cent for accident and health,
shall be required to make appropriate rate reductions or show cause why its
premium rates for such case or class of business should not be reduced. When
the rate for any case is required to be reduced, such reduction shall continue
whether the case remains with the insurer or is transferred to another insurer,
until the loss experience demonstrates that the reduction is no longer
appropriate.

No insurer shall, commencing with the policy anniversary date
on or after the effective date of this rule, charge a premium rate for credit
life or credit health and accident insurance insuring a debtor under an
existing group policy of credit life or accident and health insurance at a rate
greater than that approved for the insurer under this rule, or a premium rate
under a group policy of credit life or credit accident and health insurance for
any renewal year greater than the rate approved pursuant to this rule.

Premium rate deviations as outlined in paragraph
(E)(6)
of this rule may be utilized for a period of time not to exceed the credible
experience period or two years, whichever is less.

All rates in excess of those outlined in this rule are
withdrawn as of the effective date of this rule except that any rate provided
under a policy of group credit life insurance or group credit accident and
health insurance heretofore approved by the department of insurance in excess
of those prescribed herein may be continued until the first anniversary date of
such group policy after the effective date of this rule. Such rate may be
thereafter continued only if an application for increase in premium rates is
approved with respect thereto.

(1)
If a debtor is covered by a group credit
insurance policy providing for the payment of single premiums to the insurer,
then provision shall be made by the insurer that in the event of termination of
the master policy for any reason, insurance coverage with respect to any debtor
insured under such master policy shall be continued for the entire period for
which the single premium has been paid, subject to the debtor's right to cancel
the insurance at any time by express action.

(2)
If a debtor is covered by a group credit
insurance policy providing for payment of premiums to the insurer on a monthly
outstanding balance basis, then the group policy shall provide that, in the
event of termination of the policy for whatever reason, the insured debtor
shall be notified that coverage will continue for thirty days from the date of
notice, except where replacement of the coverage by the same or another insurer
in the same or greater amount takes place without lapse of coverage. The notice
required in this paragraph shall be given by the insurer or, at the option of
the insurer by the creditor.

(a)
Section
3918.08 of the Revised Code
requires refund formulas to be filed and approved by the superintendent. This
requirement will be considered satisfied if the refund formula to be applied by
the insurer is set forth in either the policy if the coverage is written on an
individual policy basis, or the certificate if the coverage is written on a
group basis pursuant to a master policy; provided further that such forms of
policies and certificates have not been disapproved by the superintendent. In
the event that the refund formula to be used is the "sum of digits" also
commonly known as the "rule of 78" it will be sufficient to state either
descriptive name without further explanation in the provisions of the policy or
certificate.

(b)
The refund of
premiums in case of reducing term credit life insurance or credit health and
accident insurance on which premiums are payable other than by a single premium
and of level-term credit life insurance shall be equal to the pro rata unearned
gross premium, and in the case of reducing term credit life insurance paid by a
single premium and of credit accident and health insurance shall be equal to
the amount computed by the "sum of digits" formula commonly known as the "rule
of 78."

(c)
The refund of the
amount charged to or collected from the debtor for insurance in the case of
reducing term credit life insurance or credit accident and health insurance
where said amount, if payable other than in a single sum and of level-term
credit life insurance, shall be equal to the pro rata unearned gross amount to
be collected, and in the case of reducing term credit life insurance where the
whole amount thereof is charged to or collected from the debtor in a single sum
and of credit accident and health insurance shall be equal to the amount
computed by the "sum of digits" formula commonly known as the "rule of
78."

(d)
Notwithstanding paragraph
(F)(3)(a), (F)(3)(b), or (F)(3)(c) of this rule,
the refund of premiums for credit accident and health insurance where the
premiums are payable in a single sum, and for credit life insurance where the
premiums are payable in a single sum and the amount of life insurance does not
exceed the net indebtedness, shall be equal to the single premium that would be
charged for the remaining term of the debt for the balance outstanding at the
date of refund. This formula is commonly known as the "rule of
anticipation."

(e)
No refund or
credit need be made if the amount is less than one dollar.

(f)
In the event of termination, no charge
for coverage may be made for the first fifteen days of a loan month, and a full
month may be charged for sixteen days or more of a loan month.

(1)
Each insurer writing credit
life insurance and credit accident and health insurance shall maintain
statistics, on a policy-year basis for group policies, and on a calendar-year
basis for individual policies with respect to each plan or type of coverage
showing, on an accrual basis, separately for credit life insurance and
separately for direct business and reinsurance assumed with respect to the
following:

(m)
Mean number
of individual policies and certificates in force during the calendar
year.

(2)
With respect
to credit accident and health insurance, each insurer shall keep a record for
each plan or type of coverage which, in addition to the above statistics, shall
show the nature of the benefits payable, the applicable waiting period, and the
rate at which premiums are charged therefor.

(3)
Credit insurance data and statistics
shall be submitted from time to time as requested by the superintendent of
insurance.

(1)
Each insurer transacting credit
insurance shall be responsible to conduct a thorough review of each creditor
with respect to the first year of business with such creditor. The insurer
thereafter shall conduct such reviews as reasonably may be necessary to assure
compliance with applicable statutes and rules.

(2)
Such reviews shall include, but not by
way of limitation, verification that:

(a)
Premiums and charges to debtors are properly calculated and transmitted to the
insurer, based on rates permitted under statutes and the superintendent's rules
and on the amounts of indebtedness actually insured; and

(c)
Disclosure
forms are distributed before the debtor becomes obligated to purchase
insurance.

(3)
An
insurer's responsibilities are not discharged or avoided by the delegation of
premium collection or refund calculation or check or draft drawing, and the
actions of such delegatee will be considered as the acts of the insurer.

The insurer shall maintain records of such reviews for three
years, and such records will be subject to call and review by the
superintendent at his discretion.

(a)
For credit insurance written prior to January 1, 2009, in the state of Ohio,
all insurers will be required to maintain reserves not less than 1958 "CET
Table of Mortality" at four and one-half per cent interest.

(b)
For credit insurance written on or after
January 1, 2009, in the state of Ohio, all insurers will be required to
maintain reserves not less than "2001 Male Composite Ultimate CSO Mortality" at
the maximum valuation interest rate for life insurance as defined in section
3903.721 of the Revised
Code.

(c)
When the credit life
insurance policy or certificate insures two lives, the minimum standard shall
be twice the mortality in the "2001 CSO Male Composite Ultimate Mortality"
table based on the age of the older insured.

(d)
In addition to the mortality reserve, the
extra liability for refunds shall be established and maintained as part of the
total reserve. Any reserve basis which in the aggregate equals or produces a
greater reserve not less than this basis will be acceptable to the
superintendent. Also, proper rate credit and similar reserves approved by the
superintendent shall be carried by the companies on such risks.

(a)
For credit insurance written prior to
January 1, 2009, the reserve must not be less than a reserve based on the 1964
"Commissioner's disability table" at three per cent annual interest. However,
should an insurer, after establishing a credit disability reserve on the 1964
"Commissioner's disability table", develop a disability reserve for such
disability policies that is less than the premium that would have been charged
for the remaining benefits for the balance of the term, then an additional
reserve must be established so that such aggregate total shall not be less than
the premium that would have been charged for the remaining benefits for the
balance of the term, for such disability policies. The mean of the gross
unearned premiums calculated on a "rule of 78" and a pro rata basis shall be
deemed to meet the requirements of this provision.

(b)
For credit insurance written on or after
January 1, 2009, the reserve must not be less than a reserve based on the
morbidity assumption as described in paragraph (I)(2)(c)
of this rule at the maximum valuation interest rate for ordinary life insurance
as defined in section
3903.721 of the Revised Code.
However, should an insurer, after establishing a credit disability reserve on
the 1985 "CIDA Table", develop a disability reserve for such disability
policies that is less than the premium that would have been charged for the
remaining benefits for the balance of the term, then an additional reserve must
be established so that such aggregate total shall not be less than the premium
that would have been charged for the remaining benefits for the balance of the
term, for such disability policies. The mean of the gross unearned premiums
calculated on the "rule of 78" and a pro rata basis shall be deemed to meet the
requirements of this provision.

(c)
The morbidity assumption for use in determining the minimum standard for
valuation of single premium credit disability insurance contract reserves are:

(i)
For plans having fewer than a fifteen day
elimination period, the "1985 Commissioners Individual Disability Table A"
(85CIDA) with claim incidence rates increased by twelve per cent; or

(ii)
For plans having greater than a fourteen
day elimination period, the 85CIDA for a fourteen-day elimination period with
claim incidence rates increased by twelve per cent.

If any paragraph, term or provision of
this rule is adjudged invalid for any reason, the judgment shall not affect,
impair or invalidate any other paragraph, term or provision of this rule, but
the remaining paragraphs, terms and provisions shall be and continue in full
force and effect.

The purpose of this rule is for adoption by the superintendent
of a plan of operation submitted by the board of governors of the "Ohio Fair
Plan Underwriting Association". The plan of operation has been formulated for
the purpose of making basic property and homeowners' insurance coverage, as
identified in section
3929.42 of the Revised Code,
available for qualified property owned by persons who have been unable to
secure such insurance in the normal insurance market.

This rule is promulgated pursuant to the authority vested in
the superintendent under section
3901.041 of the Revised Code.
This plan of operation is adopted pursuant to section
3929.43 of the Revised Code and
implements sections 3929.41 to
3929.49 of the Revised
Code.

(2)
"Basic property
insurance" means insurance against direct loss to property as defined and
limited in standard fire policies and extended coverage endorsements thereon,
as approved by the superintendent, and insurance for such types, classes and
locations of property against the perils of vandalism, malicious mischief,
burglary, theft or liability, as the superintendent shall designate.
The association is also
authorized to provide insurance against the perils of burglary, robbery, and
theft for properties. Such coverage is to be provided by separate policies.
Basic property insurance does not include automobile insurance or insurance on
manufacturing risks.

(3)
"Environmental hazard" means any hazardous condition that might give rise to
loss under an insurance contract, but which is beyond the control of the
property owner.

(5)
"Underwriting
standards" means the underwriting standards for basic property insurance and
homeowners' insurance which have been filed with the superintendent.

(6)
"Homeowners' insurance" means insurance
on owner-occupied dwellings providing personal multi-peril property and
liability coverages, commonly known as homeowners' insurance, subject to
underwriting standards, exclusions, deductibles, rates and conditions as are
customarily used by member insurers for similar coverages.

(7)
"Location" means real and personal
property consisting of and contained in a single building or in contiguous
buildings under one ownership.

(8)
"Urban area" means the state of Ohio having been so designated by the
superintendent.

(9)
"Superintendent" means the superintendent of insurance of the state of
Ohio.

(10)
"Member insurer" means
an insurer required to be a member of the association by section
3929.43 of the Revised
Code.

(11)
"Licensed agent" means
any person licensed by the superintendent pursuant to section
3905.01 of the Revised
Code.

(12)
"Board" means the board
of governors of the association authorized pursuant to section
3929.43 of the Revised
Code.

(13)
"Applicant" means any
person applying for insurance from the association .

Member insurers shall provide written notice of cancellation or
nonrenewal for any risk eligible for insurance through the association, (except
for non-payment of premium, evidence of incendiarism, or misrepresentation) not
less than thirty days prior to cancellation or nonrenewal. The notice shall
explain to the insured the procedures for making application to the
association. This thirty-day notice shall not apply to binders of thirty days
duration or less.

(1)
Upon request, a licensed
agent shall assist any owner of property in completing an application for
insurance with the association.

(2)
No licensed agent, although licensed to represent one or more member insurers
of the association, shall hold himself out as an agent of the association or
have any authority to bind any risk for the association.

(1)
The maximum limits of
liability for basic property insurance and homeowners' insurance per location
through the association is one million five hundred thousand dollars. The
maximum limit of liability for residential crime insurance is ten thousand
dollars. The maximum limit of liability for commercial crime insurance is
fifteen thousand dollars.

(2)
The
association may require that vandalism and malicious mischief coverage be
written in conjunction with extended coverage.

(3)
The association is authorized to issue
mine subsidence insurance coverage to its policyholders pursuant to sections
3929.50 to
3929.61 of the Revised Code and
as provided for in the plan of operations of the "Mine Subsidence Insurance
Underwriting Association."

(4)
The
association is not authorized to provide insurance coverage for automobiles or
manufacturing risks.

(1)
Any person having an insurable
interest in real or tangible personal property, or both, at a fixed location in
Ohio, who has been unable to obtain basic property insurance or homeowners'
insurance, shall be granted upon application to the association, an inspection
of the property . The inspection
shall be made only of property requiring an inspection to determine eligibility
for fair plan coverage. The inspection shall be free of charge to the
applicant.

(2)
All inspection
reports shall be in writing and shall contain the information necessary to
determine eligibility for coverage pursuant to the association's underwriting
guide as filed with the superintendent.

(3)
If an interior inspection is necessary to
determine eligibility of property described in an application submitted to the
association:

(a)
The inspector or inspection
company shall contact the new applicant and arrange for the applicant
or the person designated by the applicant to be
present during the inspection. The inspector shall not recommend correction of
physical deficiencies or advise the applicant whether the association will
provide coverage. The inspection report shall provide any information necessary
for underwriting but shall not refer to environmental hazards. Physical
deficiencies shall be reported on the inspection report. Vacancy or unoccupancy
shall be reported on the inspection report.

(b)
The inspection report shall contain
information describing the occupancy and other
observations of the risk.

(4)
Subsequent to the inspection of a
property, the association shall indicate to the new applicant any condition
charges which have been applied by the association.

(5)
After the inspection report has been
completed, a copy of the completed inspection report, and any photograph,
indicating the pertinent features of the building , maintenance, and occupancy shall be
sent within ten days to the association.

(6)
The association shall, within ten
business days after receipt of the inspection report, advise the applicant and
his licensed agent that:

(a)
The risk is
acceptable, and if condition charges have been imposed, the improvements
necessary to remove the condition charges; or

(b)
The risk will be acceptable if the
improvements noted in the report are made by the applicant
; or

(7)
The association shall not refuse to
insure any risk because of an environmental hazard.

(8)
The association may, for cause upon
information or well-founded belief without notice to the insured at any time
during the policy term, cause a property insured by it to be inspected for the
purpose of determining whether the property meets the association's
underwriting standards. Reinspections may also be made upon the request of the
insured, for statistical purposes, upon change in type of occupancy, or upon a
reasonable periodic schedule. The association may, upon the basis of the report
of reinspection, refuse to renew or may cancel a policy in accordance with its
terms and this plan of operation. Any person aggrieved by such decision may
appeal, in accordance with paragraph (J) of this rule. The association need not
afford an insured the opportunity to be present during a reinspection nor
furnish the insured with a copy of a reinspection report. If an insured
requests a copy of a reinspection report, the association shall provide a copy
to the insured.

(9)
If an
inspection report shows that a property is in violation of any building,
housing, air pollution, sanitation, health, fire or safety code, ordinance or
rule, or if an applicant otherwise has received written notice of any violation
of such a code, ordinance of rule, the applicant shall also submit to the
association a detailed plan that indicates the manner and estimated period of
time in which violation will be corrected. In no case will the association
provide coverage unless the necessary corrections are to commence within thirty
days following the date of the application. If the association is satisfied
that the violations are subject to correction within a reasonable period of
time and that the applicant otherwise meets the requirements of section
3929.44 of the Revised Code, it
may issue a policy or binder to the applicant on the condition that the plan be
implemented and completed on schedule and that the property be
reinspected.

(1)
Every
policy written by the association shall include an additional policy condition
representing that:

(a)
At least two insurance
companies authorized to do business in Ohio have declined to grant the coverage
requested in the application; and

(b)
There are no outstanding taxes,
assessments, penalties or charges with respect to the property to be insured;
and

(c)
The applicant has not
received written notice from an authorized public entity stating that his
property is in violation of any building, housing, air pollution, sanitation,
health, fire or safety code, ordinance or rule.

(2)
If the property is in violation of any
such code, ordinance or rule, and if the applicant has received such written
notice of any such violation, the applicant shall submit to the association a
detailed plan that indicates the manner and estimated period of time in which
such violations will be corrected. In no case will the association provide
coverage unless the necessary repairs are to commence within thirty days
following the date of the application. If the association is satisfied that the
violations are subject to correction within a reasonable period of time and
that the applicant otherwise meets the requirements of section
3929.44 of the Revised Code, it
may cause a policy or binder of basic property insurance to be issued to the
applicant on the condition that the plan be implemented on schedule and that
the property be reinspected.

(3)
The association is under no obligation to issue basic property insurance or
homeowners insurance to any person, unless that person and his or her property
would be insurable in the normal insurance market, and such property, except
for its location, would constitute an insurable risk in accordance with
reasonable underwriting standards. The association, in determining whether the
property is insurable, shall give no consideration to the condition of
surrounding property or properties, where such condition is not within the
control of the applicant.

(4)
If a
risk is accepted by the association, it shall deliver a policy or binder to the
applicant and if
applicable, the licensed insurance agent, upon payment of the premium to
the association. The association shall pay the authorized commission to the
licensed agent as designated by the applicant. The association shall not pay
commission to a nonresident agent. The association may pay commission to a
licensed nonresident business entity agent for assistance provided by an
individual resident agent affiliated with that nonresident business entity
agent.

(5)
The association, upon
receipt of the applicable premium from the applicant, shall
issue the policy to be effective the day following receipt of the premium. The
policy shall be issued in the name of the association as provided in section
3929.481 of the Revised
Code.

(7)
If the property is found to be an insurable risk but the inspection reveals
that there are one or more unsatisfactory conditions, charges will be imposed
in conformity with the rating plans on file with the superintendent. If the
unsatisfactory conditions are corrected, and such corrections are verified, the
charges shall be revised.

(8)
If
the association determines that the property is not an acceptable risk, the
association shall, within ten days, send the applicant a written statement
setting forth in reasonable detail the features of the property or conditions
which prevent it from constituting an acceptable risk and the corrections to be
made in order to make the property an acceptable risk.

(9)
Upon completion of the required
corrections by the applicant, the association, when notified, shall promptly
reinspect the property, if such reinspection is necessary to determine
eligibility.

(1)
Each application shall clearly indicate
the availability of a binder to an applicant.

(2)
A binder shall be issued to the applicant upon
payment to the association of the minimum binder deposit premium
and provided the application indicates that the risk
preliminarily meets the association's underwriting standards.
The earliest
a binder shall be effective is at one
minute after twelve a.m. the day following receipt of the
premium and completed application by the association
.

(3)
If inspection is impossible through no
fault of the inspection company, the association may
decline to offer coverage until such time as the property becomes
available for inspection.

(4)
The binder shall remain in effect until the risk is accepted
by the association or until cancelled and the reasons for cancellation given to
the applicant.

(5)
Binders shall be
issued for a definite period, not to exceed one year.

(a)
If
an insurance policy is to be issued, the policy shall commence on the effective
date of the binder. Policies so issued are not subject to flat
cancellation.

(b)
If an insurance
policy will not be issued, the full earned premium must be charged subject to
the rules governing cancellation of policies.

(c)
A binder shall be void upon the
acceptance of a risk by the association and the payment of any additional
premium indicated by an inspection; or upon the cancellation of a risk and
notice of reasons for the cancellation given to the
applicant.

(b)
Notice of cancellation,
together with the reasons therefore, shall be sent to the insured.

(c)
Any cancellation notice to an insured
shall be accompanied by a statement that the insured has a right to appeal as
provided in paragraph (J) of this rule.

(8)
If a property meets all underwriting
requirements, the association shall compute the actual annual premium
from rates approved by the superintendent of insurance
pursuant to Chapter 3935. of the Revised Code. A return premium will be
forwarded to the applicant if the provisional binder premium exceeds the actual
annual premium. The association shall request additional premium if the actual
annual premium exceeds the estimated provisional binder premium.

(9)
If a property does not meet all
underwriting requirements, the association shall cancel the binder on a pro
rata basis. If an applicant requests cancellation of a binder, the association
shall cancel in accordance with cancellation provisions of the coverage forms
approved by the superintendent.

(1)
Any applicant or insured shall have the
right to appeal any action or decision of the association to the board of the
association. Such appeal to the board must be made in writing within thirty
days after receipt of notice of the action or decision of the association.
Within forty-five days from receipt of an appeal, the board, upon no less than
ten days notice to the insured, shall hold a hearing on the appeal. For good
cause shown, by the insured or the association, the hearing may be continued
for not more than sixty days. The board shall render its decision on the appeal
and notify the applicant or insured of its decision no later than ten days
after the hearing. Each denial of insurance to an applicant shall be
accompanied by a statement to the applicant and the licensed agent that the
applicant has the right to appeal.

(2)
Any applicant, insured, or member insurer
shall have the right to appeal to the superintendent any action or decision of
the board. An appeal shall be made within thirty days of the board's action or
decision. The decision of the superintendent of an appeal is a final order and
is subject to judicial review as provided in Chapter 119. of the Revised
Code.

Each member of any association committee, each association
officer, employee, or member insurer, and each member of the board shall be
indemnified against liability incurred in connection with the affairs of the
association. The conditions and limits of such indemnification are provided in
"Article IX of the Constitution," "Articles of Agreement" and "Bylaws of the
Association."

The association shall obtain fidelity bonds in the amount as
prescribed by the superintendent. These bonds shall reimburse the association
for any pecuniary loss it may sustain by any act or acts of fraud or dishonesty
on the part of members of the board, association officers or employees in the
discharge of their duties.

(2)
The board shall meet as
often as may be required to perform the general duties of administration of the
association or on the call of the superintendent. Seven members of the board
shall constitute a quorum.

(3)
The
board shall appoint a general manager as administrator who shall serve at the
pleasure of the board and perform such duties as the board
designates.

(4)
The board may
promulgate guidelines consistent with state law and the plan of operation to
govern such internal operations as investments, personnel, underwriting
standards and claims practices. The guidelines shall be in writing and filed
with the superintendent.

(5)
The
board shall undertake a public education program to assure that the services of
the association receive adequate public attention. In accordance with division
(I) of section 3929.43 of the Revised Code, the
board shall adopt a written program for decreasing the overall utilization of
the association as a source of insurance.

(1)
The association shall operate as a joint
underwriting association insuring one hundred per cent of the risk on behalf of
its member insurers. It may cede or purchase reinsurance in the name of the
association or on behalf of member insurers on eligible risks written through
the association.

(2)
Each member
insurer shall participate in the writings, expenses, assessments, profits and
losses of the association in the same proportion as a member insurer's premiums
written bear to the aggregate premiums written by all member insurers as
determined by the board.

(3)
There
shall be an annual meeting of the association and its member insurers at a time
and place fixed by the superintendent. Representatives of member insurers on
the board shall serve for a period of one year or until successors are elected
or designated.

(4)
A special
meeting may be called at such time and place designated by the superintendent
or upon the written request to the superintendent.

(5)
Twenty days notice of an annual or
special meeting shall be given in writing by the board to member insurers. A
majority of member insurers present at a meeting shall constitute a quorum.
Voting by proxy shall be permitted. Notice of any meeting shall be accompanied
by an agenda for the meeting.

(6)
Any matter may be proposed and voted upon by mail, provided such procedure is
unanimously authorized by the members of the board present and voting at any
meeting of the board. If so approved by the board, notice of any proposal shall
be mailed to member insurers not less than twenty days prior to the final date
fixed by the board for voting thereon.

(7)
At any regular or special meeting at
which the vote of member insurers is or may be required on any proposal, or any
vote of member insurers which may be taken by regular mail, email or other
electronic means on any proposal, votes shall be cast and counted on a
weighted basis in accordance with each member insurer's respective habitational
or commercial premiums written, as the case may be.

(1)
In the event any member insurer fails to
pay the assessment for its proportionate part of any loss or expense because
the member insurer is insolvent, and the board determines that the assessment
cannot be collected within a reasonable period of time, the unpaid assessment
shall be paid by the remaining member insurers, each contributing in the manner
provided by division (E) of section
3929.43 of the Revised Code, but
without regard to the premium writings of the insolvent member insurer. The
insolvent member insurer shall remain liable to the association for the full
amount of the assessment and any collection made by the association against the
assessment shall be credited and paid back to the other member insurers in the
same proportions as shall have been utilized in calculating each member
insurer's contribution toward the unpaid assessment.

(2)
No refund which would otherwise be paid
under the plan of operation shall be paid to a member when its membership has
been terminated, or to the liquidator, receiver, conservator, or statutory
successor of a member insurer until the assessment of the member insurer has
been paid. A refund shall be applied as a set-off against an assessment. Any
balance remaining shall be paid to the member insurer or to the liquidator,
receiver, conservator, or statutory successor of the member insurer.

(1)
At such times as may be
determined by the board and approved by the superintendent, the board shall
establish an annual rate of assessment needed to cover any deficit arising out
of the operation of the association. The rate of assessment shall be based upon
a reasonable estimate of a deficit expected to occur. The association may levy
advance assessments at that rate against member insurers, payable in periodic
installments, subject to approval by the superintendent.

(2)
The board may at any time levy an
assessment against member insurers to provide necessary operating
funds.

(3)
Each member insurer may
recoup assessments levied against it by adjusting its premiums for basic
property insurance and homeowner's insurance by the addition of a rating factor
computed from time to time by the board and approved by the superintendent. The
board shall notify all member insurers of the amount of the rating factor and
any changes to it.

(4)
Any member
insurer implementing a change in rates pursuant to division (D)(2) of section
3929.43 of the Revised Code,
shall file the change with the superintendent. The change shall not increase
rates more than the amount authorized by the association and approved by the
superintendent pursuant to the plan.

(1)
Every insurance policy issued by the
association shall be separately coded for statistical purposes.

(2)
The association shall comply with any
reporting requirements of the superintendent in respect of its underwriting
operations and experience. The reports shall be made at least annually in such
form and detail as may be required by the superintendent under section
3935.03 of the Revised
Code.

(3)
The association shall
report its loss and expense experience to a statistical organization approved
by the superintendent. Its loss and expense experience shall be reported in a
form and according to a plan filed by the statistical organization with the
superintendent.

(4)
The association
shall submit to the superintendent periodic reports concerning the number of
risks inspected, the number of risks accepted, the number of risks
conditionally accepted, the number of reinspections made and the number of
risks declined.

All policies, endorsements, forms, manual rates or rating
plans, minimum class rates, rating schedules, rating rules, and every
modification of the same shall be those filed with the superintendent. The
association may file special notice endorsements for review by the
superintendent. In the event that the superintendent approves a rating factor
under paragraph (Q)(3) of this rule, such increment shall be applicable to all
policies issued by the association.

The association shall file annual and quarterly financial
statements with the superintendent in the form prescribed by the
superintendent. Annual financial statements shall be prepared and furnished to
the superintendent on or before March first of the following year.

The superintendent or any person designated by
the
superintendent may examine the operation of the association in accordance
with section 3929.45 of the Revised Code. The
expenses of the examination shall be paid by the association.

If any paragraph, term or provision of this rule is adjudged
invalid for any reason, the judgment shall not affect, impair or invalidate any
other paragraph, term or provision of this rule, but the remaining paragraphs,
terms and provisions shall be and continue in full force and effect.

(1)
"Risk modification plan" (commonly called a schedule
rating plan or an individual risk premium modification plan) means the
application of judgment debits or credits to the otherwise applicable premium,
which are based upon the individual risk's variation in hazard and
characteristics of the risk otherwise not reflected.

(2)
"Experience
modification plan" means any rating plan or procedure, including a
retrospective rating plan wherein a manual rate for insurance is modified based
upon the past loss experience of the insured.

(3)
"Expense
modification plan" means any rating plan or procedure where the variation of
the premium for a particular risk corresponds to the variation in the expenses
of this particular risk from those contemplated in the manual rate for
insurance.

(4)
"Personal lines" means a policy of property and
casualty insurance issued to a natural person primarily for personal or family
protection, such as a personal automobile, homeowners, non-commercial dwelling
fire or personal umbrella policy.

Every filing for a risk modification
plan must contain satisfactory specifications of factors or elements to be
applied. The risk modification plan shall not duplicate any factor or element
already fully reflected in the basic premium or rates.

Every filing for a risk modification
plan shall indicate any eligibility criteria, including, but not limited to,
any minimum premium criteria that the insurer utilizes to determine if the risk
modification plan should be applied to a particular risk. A risk modification
plan must be applied to all eligible risks.

A limit of twenty-five per cent
maximum debit and credit shall be applied to the premium or rate based on the
application of a risk modification plan. This limitation does not apply to any
debit or credit applied to the premium or rate based on the application of an
experience modification plan or an expense modification plan.

Each company shall obtain all
information necessary to determine the proper application of the risk
modification plan to any particular risk. Each company shall maintain adequate
supporting information for inspection by the superintendent of insurance, upon
request, for a period of not less than three years.

This rule is not applicable to any
risk written by an insurer in accordance with divisions (F) and (G) of section
3935.04 of the Revised Code.
This rule is not applicable for any risk written by an insurer in accordance
with divisions (E), (F), and (G) of section
3937.03 of the Revised
Code.

If any paragraph, term or provision of
this rule is adjudged invalid for any reason, the judgment shall not affect,
impair or invalidate any other paragraph, term or provision of this rule, but
the remaining paragraphs, terms or provisions shall be and continue in full
force and effect.

If any paragraph, term or provision of
this rule is adjudged invalid for any reason, the judgment shall not affect,
impair or invalidate any other paragraph, term or provision of this rule, but
the remaining paragraphs, terms and provisions shall be and continue in full
force and effect.

(1)
Engage in any
manner or degree, for compensation of any kind, in the business of repairing,
remodeling, or replacing damaged or destroyed property, real or personal, which
damage or destruction is covered by a policy of insurance; nor have any direct
or indirect interest in, nor receive compensation of any kind from any person,
firm, association, partnership, or corporation which is engaged in such
business;

(2)
Attempt in any manner to solicit a loss during the
progress of a fire or while the fire department or any of its representatives
are in any manner engaged at the damaged premises; nor in any way interfere
with the performance of the duties of an investigator of the
state fire marshal's office, an investigator of any
fire department, or a law enforcement official of this
state
or of any political subdivision thereof;

(3)
Give or offer to give to an insured or his
representative any portion of the adjuster's fee or anticipated settlement of
the claim for loss or damage as an inducement to secure a contract for the
adjustment of a loss;

(4)
Represent himself to be an adjuster for or a
representative of any insurance company, a fire investigator, or a person
connected with any fire department or law enforcement agency;

(5)
Compensate
any person to act on his behalf in the solicitation, negotiation, or settlement
of a claim unless such person is licensed as a public insurance adjuster or a
public insurance adjuster agent;

(6)
Make an inventory or estimate of loss or damage
other than that which is fair and honest; and

(7)
Own or
acquire any direct or indirect financial interest in any property, real or
personal, which is the subject of a loss adjusted by him; nor have any direct
or indirect financial interest in the sale of any salvage of any property which
is the subject of a loss adjusted by him.

Every public insurance adjuster shall keep a full record of
his transaction as an adjuster for the previous three years and such records
shall be open at all times to the inspection of the superintendent of insurance
or his representative. Such records shall show for each loss adjusted by him:

(1)
No
public insurance adjuster shall use in his business as a public insurance
adjuster a contract whereby an insured engages or employs the public insurance
adjuster to perform the functions specified in division (A) of
section 3951.01 of the Revised
Code until thirty days after the form of such contract has been filed
with the superintendent of insurance,
unless within such time the superintendent gives the public
insurance adjuster written approval for the use of such form. If the
superintendent finds within such thirty-day period
that the form filed contains any language which is prohibited by any law of
this state, including any rule of the
superintendent, or that it is inconsistent, ambiguous,
misleading, deceptive, or likely to mislead an insured, the
superintendent will give written notice of such
finding to the public insurance adjuster who filed the form, and the public
insurance adjuster shall thereafter not use such form.

(2)
Every such contract must conspicuously
set out the fee of the public insurance adjuster for the adjustment services to
be rendered the insured pursuant to the contract.

(1)
No
insurer authorized to issue the types of insurance policies set forth in
division (B) of section
3951.01 of the Revised
Code shall:

(a)
Recognize a
public insurance adjuster as a party interested in the proceeds of any
insurance settlements arising from such policies or negotiate an insurance
settlement with a public insurance adjuster representing an insured unless such
public insurance adjuster has been duly licensed as a public insurance adjuster
by the department of insurance.

(b)
Negotiate
an insurance settlement with a representative of an insured, other than a
licensed public insurance adjuster, unless such representative has been duly
appointed as such by a court of law or is one of those persons enumerated in
division (E) of section
3951.01 of the Revised
Code.

(2)
Each insurance
company referred to in paragraph (F)(1) of this rule
shall keep a record of each insurance loss and/or settlement wherein the
insured was represented by a public insurance adjuster. Such record shall
include a copy of the public insurance adjuster's certificate of authority.

The superintendent of insurance
may suspend, revoke, or refuse to renew the license of a public insurance
adjuster or public insurance adjuster agent found to be in violation of this
rule. Such suspension, revocation, or refusal to renew shall be in addition to,
not a substitution for the penalties provided in section 3951.99 of the Revised Code.

If any paragraph, term or provision of
this rule is adjudged invalid for any reason, the judgment shall not affect,
impair or invalidate any other paragraph, term or provision of this rule, but
the remaining paragraphs, terms and provisions shall be and continue in full
force and effect.

The purpose of this rule is to provide for the
writing of policies of group insurance, on a limited basis as hereinafter
outlined, by an insurance company having a certificate of authority pursuant to
the second paragraph of section
3941.02 of the Revised Code and
to ensure that residents of Ohio are not precluded from having group insurance
where advantageous tax attributes may be applicable.

No insurance company shall issue any group policy with respect
to any kind of insurance subject to either Chapter 3935. or 3937. of the
Revised Code unless:

(1)
It is a kind
of insurance which, if issued to an employer, would permit the employer's
contributions, if any, to be deductible by the employer and to be excluded from
the gross income of the employees, their spouses, and dependents under the
applicable provisions of the Internal Revenue Code of
1986;
and

(2)
It is a kind of insurance
which the insurance company is authorized to transact pursuant to its
certificate of authority.

Any filing made by an insurance company pertaining to a group
policy authorized by this rule shall comply with and be subject to the
provisions of either Chapter 3935. or 3937. of the Revised Code, whichever is
applicable to the kind of insurance being written, and shall include an
individual certificate, to be delivered to each employee or member of the
insured group, setting forth in summary form a statement of the essential
features of the insurance coverage of such employees or members, the insurance
coverage of their dependents or members of their immediate families if they are
included in the coverage, and to whom benefits thereunder are payable. Rates
shall not be deemed to be unfairly discriminatory because different premiums
result from differences in either or both loss exposures and expense factors,
so long as the rates reflect the differences with reasonable accuracy.

No person shall act as an insurance agent in the solicitation
or issuance of a group policy authorized by this rule unless such person is
duly licensed as an agent for that kind of insurance under the applicable
sections of the Revised Code.

If any paragraph, term or provision of this rule is adjudged
invalid for any reason, the judgment shall not affect, impair or invalidate any
other paragraph, term or provision of this rule, but the remaining paragraphs,
terms and provisions shall be and continue in full force and
effect.

The purpose of this rule is to amplify section
3901.21 of the Revised Code as
it relates to the solicitation of annuities and to require the use of a
disclosure statement in conjunction with the sale of single premium deferred
annuities.

No annuity shall be advertised or solicited using any language
in advertisements or solicitation material of any kind that refers to the
annuity as being "risk free," or "guaranteed safe," or using any language with
a similar connotation.

At the time an application is taken for a single premium
deferred annuity, a disclosure form must be executed by the applicant and the
selling agent and attached to the application.

The disclosure language shall be in the exact form as set forth
in appendix I of this rule.

Each paragraph of this rule and every part of each paragraph is
an independent section and part of a section, and the holding of any section or
a part thereof to be unconstitutional, void, or ineffective for any clause does
not affect the validity or constitutionality of any other section or part
thereof.

1.
A single premium deferred annuity
(SPDA) is an insurance product (with certain investment features) which, under
current federal tax laws, allows the buyer to accrue interest for a period of
years without having to pay tax on the interest until he cashes the annuity or
arranges to receive regular payments.

2.
This annuity is NOT "risk free" or
"guaranteed safe." It is only as sound as the issuing insurance company.

3.
From the beginning of this
annuity contract the insurance company guarantees an interest rate of _____%
for a period of _____ month(s) or _____ year(s).

(Selling agent must fill in all blanks if applicable; if not
applicable, write "n/a").

Subsequent interest guarantees are as follows:

____________________________________________________________

____________________________________________________________

____________________________________________________________

____________________________________________________________

4.
Early cash surrender of
this annuity MAY result in your being charged a penalty.

5.
The selling agent earns a commission on
the sale of this annuity which he may have to pay back to the company if you
cash in your annuity early.

6.
This form MUST BE COMPLETED at the time the application for the SPDA is taken
and MUST BE ATTACHED to the application.

(1)
"Basic property insurance"
means insurance against direct loss to property as defined and limited in
dwelling fire, homeowners, and farm policies and extended coverage endorsements
thereon, and insurance for such types, classes and locations of property
against the perils of vandalism, malicious mischief, burglary or theft, as the
superintendent of insurance shall designate.

(5)
"Dwelling fire insurance" means a policy
providing property coverage on residential buildings for the perils of fire and
lightning and additional coverages.

(6)
"Member" means all insurers authorized to
write engaged in writing within the state, on a direct basis, basic property
insurance or any component thereof in multi-peril and policies.

(7)
"Mine subsidence" means loss caused by
the collapse or lateral or vertical movement of structures resulting from the
caving in of underground mines, including coal mines, clay mines, limestone
mines, and salt mines. Mine subsidence does not include loss caused by
earthquakes, landslide, volcanic eruption, or collapse of strip mines, storm
and sewer drains or rapid transit tunnels.

(8)
"Mine subsidence coverage" means the
limits and type of coverage as defined by the mine subsidence insurance
governing board in the coverage form and approved by the superintendent.

(9)
"Mine Subsidence Insurance
Underwriting Association," hereinafter referred to as "association" means the
association of members formed pursuant to section
3929.51 of the Revised Code.

(10)
"Mine Subsidence Insurance
Fund," hereinafter referred to as "fund," means the fund formed pursuant to
section 3929.52 of the Revised Code
which is administered by the board for the purpose of making available
insurance coverage against mine subsidence. The state treasurer is the
custodian of the fund.

(11)
"Plan
of operation," hereinafter referred to as "plan," means the plan of operation
approved by the superintendent for the economical, fair and nondiscriminatory
administration of the requirements identified in sections
3929.50 to
3929.53 and
3929.55 to
3929.56 and
3929.58 to
3929.61 of the Revised Code.

(13)
"Structure"
means any one to four-family dwelling as defined and limited in dwelling fire,
homeowners, and farm policies and other structures as described, defined, or
limited in the mine subsidence insurance form.

(14)
"Superintendent" means the
superintendent of insurance of the state of Ohio.

(1)
The association and fund shall be
administered by the board consisting of the director of natural resources or
the director's designee, as chairperson, the treasurer of the state or the
treasurer of state's designee, the superintendent of insurance or the
superintendent's designee, and one representative from member companies. The
representative from the member companies shall be an Ohio-domiciled member of
the association.

(2)
The board
shall approve all actions of the association, have the responsibility of
administering the association and fund.

(3)
The board shall meet as often as is
required to perform the duties of administration, and shall meet upon the
request of any single member of the board. In no event shall the board meet
less than two times per year.

Every policy of mine subsidence insurance written hereunder
shall provide that such policy does not create any liability on the part of the
member issuing such policy, the association, or any organization with which it
may contract for administrative or claims services, beyond the net premium on
such policies paid into the fund. Such policies shall create no liability
beyond the amounts in the fund, on the part of the state of Ohio, the "Ohio
Insurance Guaranty Association" and its member companies or any other person or
organization.

(a)
Every insurer that offers basic property
and homeowners insurance insuring on a direct basis to a structure located in
any county designated in paragraph (G)(2) of this rule shall offer to include,
on an optional basis, mine subsidence coverage provided by the association in
each policy of basic property insurance that is delivered, issued for delivery,
or renewed in any such designated county.

(b)
This offer shall contain language and be
in a form approved by the superintendent which includes a description of mine
subsidence coverage, a statement that the purchase of the coverage is optional,
and the premium charged for the coverage.

A member insurer who receives a request from a named insured or
applicant for mine subsidence shall forward to that named insured or applicant
an application for mine subsidence coverage. Such application may be included,
at the insurer's option, with the offer described in paragraph (G)(2)(a) of
this rule. The form of the application shall be approved by the superintendent.

(3)
The limit of liability for direct loss
caused by mine subsidence under this plan of operation shall not exceed an
amount equal to the coverage on the dwelling provided by a basic property or
homeowners policy, or three hundred thousand dollars, whichever is less, and
shall not exceed the amount expressed in the mine subsidence coverage form as
approved by the mine subsidence insurance governing board and approved by the
superintendent of insurance.

(4)
All coverage provided pursuant to this plan of operation is subject to a
deductible as expressed in the mine subsidence coverage form as approved by the
mine subsidence insurance governing board and approved by the superintendent of
insurance, but at no time shall the deductible be less than two hundred fifty
dollars, or more than five hundred dollars.

However, the premium level for mine
subsidence coverage in a county designated for optional coverage shall not
exceed an annual rate that is greater than twenty dollars. The premium level
for mine subsidence coverage in a county as designated in paragraph (G)(1) of
this rule shall not exceed an annual rate that is greater than five
dollars.

(2)
Forms. The policy forms and language
shall be approved by the superintendent.

The auditor shall audit the affairs of the fund in accordance
with section 3929.55 of the Revised Code at
least once each year. The auditor shall ascertain the expenses incurred in
making any such audit and shall certify the amount to the board for payment
from the fund.

(d)
Members reports shall be accompanied by
the appropriate remittance which shall be full premium collected for mine
subsidence coverage in the counties denoted in paragraph (G)(1) of this rule
and the net premium (gross premium written, less ceding commission) in the
counties denoted in paragraph (G)(2) of this rule less any
cancellation/returns. In the event a balance is due to the insurer, that
balance shall be carried forward as a credit against future written premiums.
An insurer may apply for a refund only if it ceases to issue basic property or
homeowner insurance coverage.

(f)
The association shall review, verify and
reconcile members' reports and research, and rectify any inconsistencies.

(g)
The association shall remit
receipts to the fund, said remittance to be supported by a summary report of
premium written, cancelled/ non-renewed, net premium written and commission taken.

(3)
Statistical
reports. Members shall compile and file, on a quarterly basis with the
financial reports, a summary report of statistics in a form approved by the
board. Such reports shall, at minimum, contain:

The fund shall receive all revenues, appropriations and
investment earnings pursuant to this plan of operation. Premiums collected will
be considered program income in accordance with the uniform administrative
requirements for grants to state and local governments and be used:

(1)
To enable the fund to be self-sustaining,
with the fund invested by the treasurer of state under guidelines established
by the board;

(2)
To provide a
reserve for payment of claims for verified claims from all types of mine
subsidence, including non-coal mining, post-1977 underground mines and
active underground mines;

With the approval of the board, the treasurer of state may
invest any monies in the fund that are in excess of the amounts required to
meet the immediate cash needs and operating expenses of the fund. The board
shall not provide guidelines for the investment of excess funds that are
broader or more liberal than the investment provisions for property casualty
insurance companies set forth in Chapter 3925. of the Revised Code.

(1)
Every insurer authorized and engaged in
writing on a direct basis any property coverages in the state of Ohio shall
execute a reinsurance agreement with the association. The form of the
reinsurance agreement shall be in a form approved by the board.

(2)
An insurer may request exemption from the
requirements of paragraph (P) of this rule by filing the exemption form with
the superintendent. The exemption shall be effective after review and approved
by the superintendent of insurance.

(3)
Any insurer who has received an exemption
shall notify the association of any change in any circumstances that would be
reason to revoke the exemption.

(1)
The board and
each of its committees and subcommittees shall provide notice of regular,
special, and emergency meetings as the same are scheduled by posting the dates,
times, locations, and agendas (if applicable) on the board's official web
site.

(2)
The board maintains a list of individuals who have
requested individual notice of each meeting. Individual notice may be given via
mail, electronic mail, or facsimile.

(a)
Any person who
desires individual mail notice of the meetings described in paragraph (S)(1) of
this rule shall make the request in writing to the board at its business
address. The board may refuse to honor a request for individual mail notice
unless the person requesting such notice has first supplied the board with a
self-addressed, stamped envelope for the transmission of each requested
notice.

(b)
Any person who desires individual electronic mail
notice of the meetings described in paragraph (S)(1) of this rule shall make a
request in writing to the board at its business address. The board shall
maintain a list of all persons who have requested individual electronic mail
notice in this manner. The board may purge the list of all entries as it deems
appropriate provided, however, that the board shall first provide notice to any
individual whose contact information will be purged at least thirty days in
advance.

(c)
Any person who desires individual facsimile mail
notice of the meetings described in paragraph (S)(1) of this rule shall make a
request in writing to the board at its business address. The board shall
maintain a list of all persons who have requested individual facsimile notice
in this manner. The board may purge the list of all entries as it deems
appropriate provided, however, that the board shall first provide notice to any
individual whose contact information will be purged at least thirty days in
advance.

(d)
The board may, at its sole option, provide for an
electronic means of requesting individual electronic mail of facsimile notice
of the meetings described in paragraph (S)(1) of this rule.

(3)
A
representative of the news media may obtain notice of all special or emergency
meetings of the council, its committees or its subcommittees by requesting such
in writing to the "Ohio Mine Subsidence Insurance Governing Board" at its
business address.

(a)
The request must provide the name of the person to be
contacted, the agency whom the person represents, and shall state whether the
person wishes to be notified of regular, special, or emergency meetings, or any
combination thereof. Additionally, the request shall specify whether the person
wishes to be notified by mail, electronic mail, or facsimile, and shall include
the appropriate contact information.

(b)
The board shall
maintain a list of all news media representatives requesting notice of special
meetings. The board may purge the list of all entries as it deems appropriate
provided, however, that the board shall first provide notice to an individual
whose contact information will be purged at least thirty days in advance.

(c)
Notice of special meetings shall be provided to news media representatives at
least twenty-four hours prior to the special meeting. Notice of emergency
meetings shall be provided to news media representatives by telephone or
electronic means as soon as practicable.

(4)
Notice given by
mail is effective upon mailing. Notice given by telephone is effective upon
providing actual notice, leaving a message containing the meeting information
with any individual who answers the number provided by the requestor or leaving
a recorded message, or, if the board makes three unsuccessful attempts to
contact the requestor directly or to leave a voice message. Notice given by
electronic means shall be complete upon transmission.

If any
paragraph, term or provision of this rule is adjudged invalid for any reason,
the judgment shall not affect, impair or invalidate any other paragraph, term
or provision of this rule, but the remaining paragraphs, terms and provisions
shall be and continue in full force and effect.

(1)
The purpose of this rule is to facilitate the
department's surveillance of the financial condition of insurers by requiring

(a)
an annual audit of financial statements
reporting the financial position and results of operation of insurers by
independent certified public accountants,

(b)
communication of internal control related
matters noted in an audit, and

(c)
management's report of internal control over financial reporting.
This rule shall apply to all insurers, except those
insurers having direct premiums written of less than one million dollars and
having less than one thousand policyholders nationwide at the end of any year.
Those insurers will be exempt from this rule for the year they do not meet this
threshold unless the superintendent makes a specific finding that compliance by
the insurer is necessary for the superintendent to carry out his or her
statutory responsibilities. Insurers having assumed premiums to contracts
and/or treaties of reinsurance of one million dollars or more will not be
exempt. Insurers filing audited financial reports in another state,
pursuant to such other state's requirement of audited financial reports, which
are found by the superintendent to be substantially similar to the requirements
herein, are exempt from this rule if:

(a)
A
copy of the audited financial report, communication of internal control related
matters noted in audit, and the accountant's letter of qualifications, which
are filed with such other states are filed with the superintendent in
accordance with the filing dates specified in paragraphs
(D), (K) and (L) of this rule. (Canadian insurers may
submit accountants' reports as filed with the office of the superintendent of
financial institutions, Canada); and

(b)
A copy of any notification or report of
adverse financial condition filed with such other state is filed with the
superintendent within the time specified in paragraph
(J) of
this rule. Foreign or alien insurers required to file management's report of
internal control over financial reporting in another state are exempt from
filing the report in this state provided the other state has substantially
similar reporting requirements and the report is filed with the superintendent
of the other state within the time specified.

(2)
This rule shall not prohibit, preclude or in any way limit the superintendent
from ordering, conducting and performing examinations of insurers under the
rules and regulations and the practice and procedures of the
department.

This rule is promulgated pursuant to
the authority vested in the superintendent under section
3901.041 of the Revised Code
which requires the superintendent to adopt, amend, and rescind rules and make
adjudications necessary to discharge his or her duties and exercise his or her
powers under Title XXXIX of the Revised Code, subject to sections
119.01 to
119.13 of the Revised Code. This
rule is issued to implement sections
3901.04 ,
3901.07 and
3901.77 of the Revised
Code.

(1)
"Audited Financial Report" means the annual report defined in the items
specified in paragraph (E) of this rule.

(2)
"Accountant" and "Independent Certified
Public Accountant" mean an independent certified public accountant or
accounting firm, as defined by the general standards of the "American Institute
of Certified Public Accountants," in good standing with the "American Institute
of Certified Public Accountants" and in all states in which it is licensed to
practice; for Canadian and British companies, it means a Canadian-chartered or
British-chartered accountant.

(3)
An "affiliate" of, or person "affiliated" with, a specific person, is a person
that directly, or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, the person
specified.

(4)
"Audit committee"
means a committee (or equivalent body) established by the board of directors of
an entity for the purpose of overseeing the accounting and financial reporting
process of an insurer or group of insurers, the
internal audit function of an insurer or group of insurers (if
applicable), and external audits of
financial statements of the insurer or group of insurers. The audit committee
of any entity that controls a group of insurers may be deemed to be the audit
committee for one or more of these controlled insurers solely for the purposes
of this rule at the election of the controlling person. Refer to paragraph
(N) of
this rule for exercising this election. If an audit committee is not designated
by the insurer, the insurer's entire board of directors shall constitute the
audit committee.

(6)
"Indemnification" means an agreement of
indemnity or a release from liability where the intent or effect is to shift or
limit in any manner the potential liability of the person or firm for failure
to adhere to applicable auditing or professional standards, whether or not
resulting in part from knowing of other misrepresentations made by the insurer
or its representatives.

(7)
"Independent board member" has the same meaning as described in paragraph
of this
rule.

(8)
"Internal audit function" means a person or persons that provide independent,
objective and reasonable assurance designed to add value and improve an
organization's operations and accomplish its objectives by bringing a
systematic disciplined approach to evaluate and improve the effectiveness of
risk management, control and governance processes.

(9)
"Internal control over financial reporting" means a process effected by an
entity's board of directors, management and other personnel designed to provide
reasonable assurance regarding the reliability of the financial statements,
i.e., those items specified in paragraphs (E)(2) to (E)(7) of this rule,
and includes those policies and procedures that:

(a)
Pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of assets;

(b)
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of the financial statements, i.e., these items specified in
paragraphs (E)(2) to (E)(7) of this rule, and that receipts
and expenditures are being made only in accordance with authorizations of
management and directors; and

(c)
Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of assets that could have a
material effect on the financial statements, i.e., these items specified in
paragraphs (E)(2) to (E)(7) of this
rule.

(10)
"SEC" means the United States securities and
exchange commission.

(11)
"Section 404"
means section 404 of the Sarbanes-Oxley Act of 2002 and the SEC's rules and
regulations promulgated thereunder.

(12)
"Section 404
Report" means management's report on "internal control over financial
reporting" as defined by the SEC and the related attestation report of the
independent certified public accountant as described in paragraph
(C)(2)
of this rule.

(13)
"SOX Compliant Entity" means an entity that
either is required to be compliant with, all of the following provisions of the
Sarbanes-Oxley Act of 2002:

(i)
the
preapproval requirements of section 201 (section 10A(i) of the Securities
Exchange Act of 1934);

(ii)
the
audit committee independence requirements of section 301 (section 10A(m)(3) of
the Securities Exchange Act of 1934); and

(15)
"Group of Insurers"
means those licensed insurers included in the reporting requirements of
sections 3901.32 to
3901.37 of the Revised Code, or
a set of insurers as identified by management, for the purpose of assessing the
effectiveness of internal controls over financial reporting.

(16)
"Statutory accounting practices" has the meaning defined in the current
editions of "Annual Statement Instructions" and the "Accounting Practices and
Procedures Manual" published by the "National Association of Insurance
Commissioners," or as otherwise prescribed by the insurance department of the
insurer's state of domicile.

(17)
"Superintendent"
means the superintendent of insurance of the state of Ohio.

(18)
"Workpapers" means the records kept by an independent certified public
accountant of the procedures followed, the tests performed, the information
obtained, and the conclusions reached pertinent to his or her audit of the
financial statements of an insurer. Workpapers may include audit planning
documentation, work programs, analyses, memoranda, letters of confirmation and
representation, abstracts of company documents and schedules of commentaries
prepared or obtained by the independent certified public accountant in the
course of his or her audit of the financial statements of an insurer and, which
support his or her opinion thereof.

(D)
General
requirements related to filing and extensions for filing of audited financial
reports and audit committee appointment

All insurers shall have an annual audit by an independent
certified public accountant and shall file an audited financial report as a
supplement to the annual statement with the superintendent on or before June
first for the immediately preceding year ended December thirty-first.
Extensions of the June first filing date may be granted in writing by the
superintendent for thirty day periods upon showing by the insurer and its
independent certified public accountant the reasons for requesting such
extension and determination by the superintendent of good cause for an
extension. The request for an extension must be submitted in writing not less
than ten days prior to the due date in sufficient detail to permit the
superintendent to make an informed decision with respect to the requested
extension.

If an extension is granted, a similar extension of thirty days
is granted to the filing of management's report of internal control over
financial reporting.

Every insurer required to file an annual audited financial
report pursuant to this rule shall designate a group of individuals as
constituting its audit committee, as defined in paragraph
(C)(4)
of this rule. The audit committee of any entity that controls an insurer may be
deemed to be the insurer's audit committee for purposes of this rule at the
election of the controlling person.

The superintendent may require an insurer to file an audited
financial report earlier than June first with ninety days advance notice to the
insurer.

The audited financial report shall report the financial
condition of the insurer as of the end of the most recent calendar year and the
results of its operations, cash flows, and changes in capital and surplus for
the year then ended in conformity with statutory accounting practices. The
audited financial report shall include the following items:

(6)
Notes to financial
statements. These notes shall be those appropriate to a CPA audited financial
report, based on applicability, materiality and significance, taking into
account the subjects covered in the instructions to and illustrations of how to
report information in the notes to financial statements section of the "NAIC"
annual statement instructions and any other notes required by the "NAIC
Accounting Practices and Procedures Manual" and shall include:

(a)
A reconciliation of differences, if any,
between the audited statutory financial statements and the annual financial
statement filed with the superintendent including a written description of the
nature of these differences; and

(b)
A narrative explanation of all
significant intercompany transactions and balances; and

(c)
A summary of ownership and relationships
of the insurer and all affiliated companies.

(7)
The financial statements included in the
audited financial report shall be prepared in a form and using language and
groupings substantially the same as the relevant sections of the annual
financial statement of the insurer filed with the superintendent and:

(a)
The financial statements shall be
comparative, presenting the amounts as of December thirty-first of the current
year and amounts as of the immediately preceding year ending December
thirty-first. (However, in the first year in which an insurer is required to
file an audited financial report, the comparative data may be omitted);
and

(1)
Each insurer required by this rule to file an audited financial report must,
within sixty days after becoming subject to such requirement, register with the
superintendent, in writing, the name and address of the independent certified
public accountant retained to conduct the annual audit required in this rule.
Insurers not previously retaining an independent certified public accountant
shall register the name and address of their retained independent certified
public accountant not less than six months before the date when the first
audited financial report is to be filed.

(2)
The insurer shall obtain a letter from
such accountant, and file a copy of such letter with the superintendent,
stating that the accountant is aware of the provisions of the insurance code
and the rules and regulations of the insurance department of its state of
domicile that relate to accounting and financial matters and affirming that he
or she will express his or her opinion on the financial statements of the
insurer in the terms of their conformity to the statutory accounting practices
prescribed or otherwise permitted by such insurance department, specifying such
exceptions as he or she may believe appropriate. If an accountant, who was not
the accountant for the insurer's most recently filed audited financial report,
is engaged to audit the insurer's financial statements, the insurer shall,
within thirty days of the date the accountant is engaged, notify the department
of this event.

(3)
If an accountant
who was the accountant for the immediately preceding filed audited financial
report is dismissed or resigns, the insurer shall within five business days
notify the department of insurance of this event. The insurer shall also
furnish the superintendent with a separate letter within ten business days of
the above notification stating whether in the twenty four months preceding such
engagement there were any disagreements with the former accountant on any
matter of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of the former accountant, would have caused him or her to make
reference to the subject matter of the disagreement in connection with his or
her opinion. Disagreements contemplated by this paragraph are those that occur
at the decision-making level, i.e., between personnel of the insurer
responsible for presentation of its financial statements and personnel of the
accounting firm responsible for rendering its report. The insurer shall also
request, in writing, such former accountant to furnish a letter, addressed to
the insurer, stating whether the accountant agrees with the statements
contained in the insurer's letter and, if not, stating the reasons for which he
or she does not agree; and the insurer shall furnish such responsive letter
from the former accountant to the superintendent, together with its own
letter.

An insurer may not use any person or firm as an independent
certified public accountant if such person or firm:

(1)
is not in good standing with the
"American Institute of Certified Public Accountants" in all states in which the
person or firm is licensed to practice or, for a Canadian or British company,
that is not a chartered accountant;

(2)
has either directly or indirectly entered
into an agreement of indemnity or release from liability (collectively referred
to as "indemnification") with respect to the audit of the insurer. Except as
otherwise provided herein, an insurer may use a certified public accountant as
its independent certified public accountant only if and for as long as such
accountant conforms to the standards of his or her profession, as contained in
the "Code of Professional Conduct" of the "American Institute of Certified
Public Accountants" and "Rules of Professional Conduct" of the "Accountancy
Board of Ohio," or similar code.

The lead (or coordinating) audit partner (having primary
responsibility for the audit) may not act in that capacity for more than five
consecutive years. The person shall be disqualified from acting in that or a
similar capacity for the same company or its insurance subsidiaries or
affiliates for a period of five consecutive years. An insurer may make
application to the superintendent of insurance for relief from the above
rotation requirement on the basis of unusual circumstances. This application
should be made at least thirty days before the end of the calendar year. The
superintendent may consider the following factors in determining if the relief
should be granted:

(a)
number of
partners, expertise of the partners or the number of insurance clients in the
currently registered firm;

(c)
number of jurisdictions in which the
insurer transacts business. The insurers shall file, with its annual statement
filing, the proof of relief from the five years limitation with the states that
it is licensed in or doing business in and with the "National Association of
Insurance Commissioners." If the nondomestic state accepts electronic files
with the NAIC, the insurer shall file the approval in an electronic format
acceptable to the "National Association of Insurance Commissioners."

The superintendent shall not recognize as a qualified
independent certified public accountant, nor accept any annual audited
financial report, prepared in whole or in part by, any natural person who (1)
has been convicted of fraud, bribery, a violation of the Racketeer Influenced
and Corrupt Organizations Act,
18 U.S.C. sections 1961 -
1968, or any dishonest conduct or
practices under federal or state law; (2) has been found to have violated the
insurance laws of this state with respect to any previous reports submitted
under this rule; or (3) has demonstrated a pattern or practice of failing to
detect or disclose material information in previous reports filed under the
provisions of this requirement.

The superintendent may hold a hearing to determine whether a
certified public accountant is qualified and, considering the evidence
presented, may rule that the accountant is not qualified for purposes of
expressing his or her opinion on the financial statements in the annual audited
financial report made pursuant to this requirement and require the insurer to
replace the accountant with another whose relationship with the insurer is
qualified within the meaning of this requirement.

(1)
The superintendent shall not recognize as
a qualified independent certified public accountant, nor accept an annual
audited financial report, prepared in whole or in part by an accountant who
provides to an insurer, contemporaneously with the audit, the following
non-audit services:

(a)
Bookkeeping or other
services related to the accounting records or financial statements of the
insurer;

(d)
Actuarial-oriented advisory services
involving the determination of amounts recorded in the financial statements.
The accountant may assist an insurer in understanding the methods, assumptions
and inputs used in the determination of amounts recorded in the financial
statement only if it is reasonable to conclude that the services provided will
not be subject to audit procedures during an audit of the insurer's financial
statements. An accountant's actuary may also issue an actuarial opinion or
certification ("opinion") on an insurer's reserves if the following conditions
have been met:

(i)
Neither the accountant nor
the accountant's actuary has performed any management functions or made any
management decisions:

(ii)
The
insurer has competent personnel (or engages a third party actuary) to estimate
the reserves for which management takes responsibility:

(iii)
The accountant's actuary tests the
reasonableness of the reserves after the insurer's management has determined
the amount of the reserves:

(i)
Any
other services that the superintendent determines, by rule, are
impermissible.

(2)
In general, the principles of
independence with respect to services provided by the qualified independent
certified public accountant are largely predicted on three basic principles,
violations of which would impair the accountant's independence. The principles
are that the accountant cannot function in the role of management, cannot audit
his or her own work, and cannot serve in an advocacy role for the insurer.

Insurers having direct written and assumed premiums of less
than one hundred million dollars in any calendar year may request an exemption
from this paragraph. The insurer shall file with the superintendent a written
statement discussing the reasons why the insurer should be exempt from these
provisions. If the superintendent finds, upon review of this statement, that
compliance with this rule would constitute a financial or organizational
hardship upon the insurer, an exemption may be granted.

(3)
A qualified independent certified public
accountant who performs the audit may engage in other non-audit services for an
insurer, including tax services, that are not described in paragraphs
(G)(1) of this rule or that do not conflict with
paragraph (G)(2) of this rule, only if the activity is approved
in advance by the audit committee for the insurer, in accordance with paragraph
(G)(4) of
this rule.

(4)
All auditing
services and non-audit services provided to an insurer by the qualified
independent certified public accountant of the insurer shall be preapproved by
the audit committee of the insurer. The preapproval requirement is waived with
respect to non-audit services if the insurer is a "SOX" compliant entity or a
direct or indirect wholly-owned subsidiary of a "SOX" compliant entity or;

(a)
The aggregate amount of all such
non-audit services provided to the insurer constitutes not more than five per
cent of the total amount of fees paid by the insurer to its qualified
independent certified public account during the fiscal year in which the
non-audit services are provided:

(b)
The services were not recognized by the
insurer at the time of the engagement to be non-audit services; and

(c)
The services are promptly brought to the
attention of the audit committee and approved prior to the completion of the
audit by the audit committee or by one or more members of the audit committee
who are members of the board of directors to whom authority to grant such
approvals has been delegated by the audit committee.

(5)
The audit committee of an insurer may
delegate to one or more designated members of the audit committee the authority
to grant the preapprovals required by paragraph (G)(4) of this
rule. The decisions of any member to whom this authority is delegated shall be
presented to the full audit committee at each of its scheduled
meetings.

(6)
The superintendent
shall not recognize an independent certified public accountant as qualified for
particular insurer if a member of the board, president, chief executive
officer, controller, chief financial officer, chief accounting officer, or any
person serving in an equivalent position for that insurer, was employed by the
independent certified public accountant and participated in the audit of that
insurer during the one year period preceding the date that the most current
statutory opinion is due. This section shall only apply to partners and senior
managers involved in the insurer's preceding audit. An insurer may make an
application to the superintendent for relief from the requirement on the basis
of unusual circumstances.

(7)
The
insurer shall file, with its annual statement filing, the approval for relief
from paragraph (G)(6) of this rule with the states that it is
licensed in or doing business in and the NAIC. If the nondomestic state accepts
electronic filing with the NAIC, the insurer shall file the approval in an
electronic format acceptable to the NAIC.

An insurer may make an annual written application to the
superintendent for approval to file audited consolidated or combined financial
statements in lieu of separate annual audited financial statements if the
insurer is part of a group of insurance companies which utilizes a pooling or
one hundred percent reinsurance agreement that affects the solvency and
integrity of the insurer's reserves and such insurer cedes all of its direct
and assumed business to the pool. In such cases, a columnar consolidating or
combining worksheet shall be filed with the report, as follows:

(1)
Amounts shown on the consolidated or
combined audited financial report shall be shown on the worksheet;

(2)
Amounts for each insurer subject to this
rule shall be stated separately;

(3)
Non-insurance operations may be shown on
the worksheet on a combined or individual basis;

(4)
Explanations of consolidating and
eliminating entries shall be included; and

(5)
A reconciliation shall be included of any
differences between the amounts shown in the individual insurer columns of the
worksheet and comparable amounts shown on the financial statements of the
insurers.

(I)
Scope of audit and
report of independent certified public accountant

Financial statements furnished pursuant to paragraph
(E) of
this rule shall be examined by an independent certified public accountant. The
audit of the insurer's financial statements shall be conducted in accordance
with generally accepted auditing standards. In accordance with AU
section 319 of the professional standards of the
accountants "American Institute of Certified Public Accountants",
consideration of internal control in a financial statement audit, the
independent certified public accountant should obtain an understanding of
internal control sufficient to plan the audit. To the extent required by AU
section 319, for those insurers required to file
a management's report of internal control over financial reporting pursuant to
paragraph (Q) of this rule, the independent certified public
accountant should consider (as that term is defined in Statement on Auditing
Standards (SAS) No. 102, defining professional requirements in statements on
auditing standards or its replacement) the most recently available report in
planning and performing the audit of the statutory financial statements.
Consideration should be given to such other standards illustrated in the
"Financial Condition Examiner's Handbook" promulgated by the "National
Association of Insurance Commissioners" as the independent certified public
accountant deems necessary.

(1)
The insurer
required to furnish the annual audited financial report shall require the
independent certified public accountant to report in writing within five
business days to the board of directors or its audit committee any
determination by the independent certified public accountant that the insurer
has materially misstated its financial condition as reported to the
superintendent as of the balance sheet date currently under audit or that the
insurer does not meet the minimum capital and surplus requirement of the
Revised Code as of that date. An insurer who has received a report pursuant to
this paragraph shall forward a copy of the report to the superintendent within
five business days of receipt of such report and shall provide the independent
certified public accountant making the report with evidence of the report being
furnished to the superintendent. If the independent certified public accountant
fails to receive such evidence within the required five business day period,
the independent certified public accountant shall furnish to the superintendent
a copy of its report within the next five business days.

(2)
No independent certified public
accountant shall be liable in any manner to any person for any statement made
in connection with the above paragraph if such statement is made in good faith
in compliance with the above paragraph.

(3)
If the accountant, subsequent to the date
of the audited financial report filed pursuant to this rule, becomes aware of
facts which might have affected his or her report, the department shall note
the obligation of the accountant to take such action as prescribed in volume
one, section AU five hundred sixty one of the "Professional Standards of the
American Institute of Certified Public Accountants," as amended.

(K)
Communication of internal control related matters
noted in an audit

In addition to the annual audited financial report, each
insurer shall furnish the superintendent with a written communication as to any
unremediated material weakness in its internal controls over financial
reporting noted during the audit. Such communication shall be prepared by the
accountant within sixty days after the filing of the annual audited financial
report, and shall contain:

(1)
A
description of any unremediated material weakness (as the term material
weakness is defined by statement on auditing standard
sixty,
communication of internal control related matters noted in an audit, or its
replacement) as of December thirty-first immediately preceding (so as to
coincide with the audited financial report discussed in paragraph
(D) of
this rule) in the insurer's internal control over
financial reporting noted by the accountant during the course of their audit of
the financial statements. If no unremediated material weaknesses are noted, the
communication should so state.

(2)
The insurer is required to provide a description of remedial action taken or
proposed to correct unremediated material weaknesses, if the actions are not
described in the accountant's communications.

The accountant shall furnish the insurer in connection with,
and for inclusion in, the filing of the annual audited financial report, a
letter stating:

(1)
That he or she is
independent with respect to the insurer and conforms to the standards of his or
her profession as contained in the "Code of Professional Ethics" and
pronouncements of the "American Institute of Certified Public Accountants" and
the "Rules of Professional Conduct" of the "Accountancy Board of Ohio" or other
state board of public accountancy that performs the same licensing
function.

(2)
The background and
experience in general, and the experience in audits of insurers of the staff
assigned to the engagement and whether each is an independent certified public
accountant. Nothing within this requirement shall be construed as prohibiting
the accountant from utilizing such staff as he or she deems appropriate where
such use is consistent with the standards prescribed by generally accepted
auditing standards.

(3)
That the
accountant understands the annual audited financial report and his or her
opinion thereon will be filed in compliance with this requirement and that the
superintendent will be relying on this information in the monitoring and
regulation of the financial position of insurers.

(4)
That the accountant consents to the
requirements of paragraph (M) of this rule and that the accountant consents
and agrees to make available for review by the superintendent his
or her designee or his or
her appointed agent, the workpapers, as defined in paragraph
(C)(18) of this rule.

(5)
A representation that the accountant is
properly licensed by the "Accountancy Board of Ohio" and that he or she is a
member in good standing in the "American Institute of Certified Public
Accountants."

(6)
A representation
that the accountant is in compliance with the requirements of paragraph
(G) of
this rule.

(M)
Availability and
maintenance of independent certified public accountant workpapers

Every insurer required to file an audited financial report
pursuant to this rule shall require the accountant to make available for review
by department examiners the workpapers prepared in the conduct of his or her
audit and any communications related to the audit
between the accountant and the insurer, at the offices of the insurer, at the
department, or at any other reasonable place designated by the superintendent.
The insurer shall require that the accountant retain the workpapers and
communications until the domiciliary department has filed a report on
examination covering the period of the audit, but for no longer than seven
years from the date of the audit report.

In the conduct of the aforementioned periodic review by the
domiciliary department examiners, it shall be agreed that photocopies of
pertinent audit workpapers may be made and retained by the domiciliary
department. Such reviews by the domiciliary department examiners shall be
considered investigations and all workpapers and communications obtained during
the course of such investigations shall be afforded the same confidentiality as
other examination workpapers generated by the domiciliary
department.

This section shall not apply to foreign or alien insurers
licensed in this state or an insurer that is a "SOX" compliant entity or a
direct or indirect wholly-owned subsidiary of a "SOX" compliant entity.

The audit committee shall be directly responsible for the
appointment, compensation and oversight of the work of any accountant
(including resolution of disagreements between management and the accountant
regarding financial reporting) for the purpose of preparing or issuing audited
financial report or related work pursuant to this regulation. Each accountant
shall report directly to the audit committee.

The audit committee of an insurer or
group of insurers shall be responsible for overseeing the insurer's internal
audit function and granting the person or persons performing the function
suitable authority and resources to fulfill their responsibilities if required
by paragraph (O) of this rule.

Each member of the audit committee shall be a member of the
board of directors of the insurer or a member of the board of directors of an
entity elected pursuant to this paragraph and paragraph
(C)(4)
of this rule.

In order to be considered independent for purposes of this
rule, a member of the audit committee may not, other than in his or her
capacity as a member of the audit committee, the board of directors, or any
other board committee, accept any consulting, advisory or other compensatory
fee from the entity or be an affiliated person of the entity or any subsidiary
thereof. However, if law requires the board participation by otherwise
non-independent members, that law shall prevail and such members may
participate in the audit committee and be designated as independent for audit
committee purposes, unless they are an officer or employee of the insurer or
one of its affiliates.

If a member of the audit committee ceases to be independent for
reasons outside the member's reasonable control, that person, with notice by
the responsible entity to the domiciliary state, may remain an audit committee
member of the responsible entity until the earlier of the next annual meeting
of the responsible entity or one year from the occurrence of the event that
caused the member to be no longer independent.

To exercise the election of the controlling person to designate
the audit committee for purposes of this rule, the ultimate controlling person
shall provide written notice to the domiciliary commissioners of the affected
insurers. Notification shall be made timely prior to the issuance of the
statutory audit report and include a description of the basis for the election.
The election can be changed through notice to the domiciliary commissioner by
the insurer, which shall include a description of the basis for the change. The
election shall remain in effect for perpetuity, until rescinded.

The audit committee shall require the accountant that performs
for an insurer any audit required by this regulation to timely report to the
audit committee in accordance with the requirements of "SAS"
No. 61, "Communication with Audit Committees," or
its replacement, including: All significant accounting policies and material
permitted practices; All material alternative treatments of financial
information within statutory accounting principles that have been discussed
with management officials of the insurer, ramifications of the use of the
alternative disclosures and treatments, and the treatment preferred by the
accountant; and other material written communications between the accountant
and the management of the insurer, such as any management letter or schedule of
unadjusted differences.

If an insurer is a member of an insurance holding company
system, the reports required above may be provided to the audit committee on an
aggregate basis for insurers in the holding company system, provided that any
substantial differences among insurers in the system are identified to the
audit committee.

The portion of independent audit committee members shall meet
or exceed the following criteria:

Prior Calendar Year Direct Written and Assumed Premiums

$0- $300,000,000

$300,000,000- $500,000,000

Over $500,000,000

No minimum requirements. See also note A and
B.

Majority (50% or more) of members shall be independent.
See also note A and B.

Supermajority of members (75% or more) shall be
independent. See also Note A and B.

Note A: The superintendent has authority afforded by state law
to require the entity's board to enact improvements to the independence of the
audit committee membership if the insurer is in a "RBC" action level event,
meets one or more of the standards of an insurer deemed to be in hazardous
financial condition, or otherwise exhibits qualities of a troubled
insurer.

Note B: All insurers with less than five hundred million
dollars in prior year direct written and assumed premiums are encouraged to
structure their audit committees with at least a supermajority of independent
audit committee members.

Note C: Prior calendar year direct written and assumed premiums
shall be the combined total of direct premiums and assumed premiums from
non-affiliates for the reporting entities.

An insurer with direct written and assumed premium, excluding
premiums reinsured with the federal crop insurance corporation and federal
flood program, less than five hundred million dollars may make application to
the superintendent for a waiver from these requirements based upon hardship.
The insurer shall file, with its annual statement filing, the approval for
relief from paragraph (N) of this rule with the states that
it is licensed in or doing business in and the NAIC. If the non-domestic state
accepts electronic filing with the NAIC, the insurer shall file the approval in
an electronic format acceptable to the NAIC.

(1)
An insurer is exempt from the requirements of paragraph (O)
of this rule if:

(a)
The insurer has annual direct written and unaffiliated
assumed premium, including international direct and assumed premium but
excluding premiums reinsured with the "Federal Crop Insurance Corporation" and
"Federal Flood Program", less than five hundred million dollars;
and

(b)
If the insurer is a member of a group of insurers that
has an annual direct written and unaffiliated assumed premium including
international direct and assumed premium, but excluding premiums reinsured with
the "Federal Crop Insurance Corporation" and "Federal Flood Program", less than
one billion dollars.

(2)
The insurer or
group of insurers shall establish an internal audit function providing
independent, objective and reasonable assurance to the audit committee and
insurer management regarding the insurer's governance, risk management and
internal controls. This assurance shall be provided by performing general and
specific audits, reviews and tests and by employing other techniques deemed
necessary to protect assets, evaluate control effectiveness and efficiency, and
evaluate compliance with policies and regulations.

(3)
In order to
ensure that internal auditors remain objective, the internal audit function
must be organizationally independent. Specifically, the internal audit function
will not defer ultimate judgment on audit matters to others, and shall appoint
an individual to head the internal audit function who will have direct and
unrestricted access to the board of directors. Organizational independence does
not preclude dual-reporting relationships.

(4)
The head of
internal audit function shall report to the audit committee regularly, but no
less than annually, on the periodic audit plan, factors that may adversely
impact the internal audit function's independence or effectiveness, material
findings from completed audits and the appropriateness of corrective actions
implemented by management as a result of audit findings.

(5)
If an insurer is
a member of an insurance holding company system or included in a group of
insurers, the insurer may satisfy the internal audit function requirements set
forth in paragraph (O) of this rule at the ultimate controlling parent level,
an intermediate holding company level or the individual legal entity
level.

(P)
Conduct of insurer
in connection with the preparation of required reports and documents

No director or officer of an insurer shall, directly or
indirectly:

(1)
Make or cause to be
made a materially false or misleading statement to an accountant in connection
with any audit, review or communication required under this rule; or

(2)
Omit to state, or cause another person to
omit to state, any material fact necessary in order to make statements made, in
light of the circumstances under which the statements were made, not misleading
to an accountant in connection with any audit, review or communication required
under this rule.

No officer or director of an insurer, or any other person
acting under the direction thereof, shall directly or indirectly take any
action to coerce, manipulate, mislead or fraudulently influence any accountant
engaged in the performance of an audit pursuant to this rule if that person
knew or should have known that the action, if successful, could result in
rendering the insurer's financial statements materially misleading.

Actions that, "if successful, could result in rendering the
insurer's financial statements materially misleading" include, but are not
limited to, actions taken at any time with respect to the professional
engagement period to coerce, manipulate, mislead or fraudulently influence an
accountant:

(a)
To issue or reissue a
report on an insurer's financial statements that is not warranted in the
circumstances (due to material violations of statutory accounting principles
prescribed by the commissioner, generally accepted auditing standards, or other
professional or regulatory standards):

(b)
Not to perform audit, review or other
procedures required by generally accepted auditing standards or other
professional standards;

Every insurer required to file an audited financial report
pursuant to this rule that has annual direct written and assumed premiums,
excluding premiums reinsured with the federal crop insurance corporation and
federal flood program, of five hundred million dollars or more shall prepare a
report of the insurer's or group of insurer's internal control over financial
reporting as these terms are defined in paragraph (C) of this rule.
The report shall be filed with the superintendent along with the communication
of internal control related matters noted in an audit described in paragraph
(K) of
this rule. Management's report of internal control over financial reporting
shall be as of December thirty-first immediately preceding.

Notwithstanding the premium threshold, as stated above, the
superintendent may require an insurer to file management's report of internal
control over financial reporting if the insurer is in any "RBC" level event, or
meets any one or more of the standards of an insurer deemed to be in hazardous
financial condition as defined in sections
3903.01 to
3903.59 of the Revised
Code.

(2)
Part of a holding company
system whose parent is directly subject to "Section 404";

(3)
Not directly subject to "Section 404" but
is a "SOX" compliant entity; or

(4)
A member of a holding company system whose parent is not directly subject to
"Section 404" but is a "SOX" compliant entity.

may file its or its parents "Section 404" report on internal
control and an addendum in satisfaction of this paragraph's requirement
provided that those internal controls of the insurer or group of insurers
having a material impact on the preparation of the insurer or group of
insurers' its audited statutory financial statements were included in the scope
of the "Section 404" reports. The addendum shall be a positive statement by
management that there are no material processes with respect to the preparation
of the insurer's or group of insurers' audited statutory financial statements
excluded from the "Section 404" report. If there are internal controls of the
insurer or group of insurers that have a material impact on the preparation of
the insurer's or group of insurers' audited statutory financial statements and
those internal controls were not included in the scope of the "Section 404"
report, the insurer or group of insurers may either file (a) a
report as required by paragraph (Q) of this rule, or (b) the
"Section 404" report and a report as required by paragraph (Q) of this
rule for those internal controls that have a material impact on the
insurer's or group of insurers' audited statutory financial statements not
covered by the "Section 404" report.

Management's report of internal control over financial
reporting shall include:

(a)
A
statement that management is responsible for establishing and maintaining
adequate control over financial reporting;

(b)
A statement that management has
established internal control over financial reporting and an assertion to the
best of management's knowledge and belief, after diligent inquiry, as to
whether its internal control over financial reporting is effective to provide
reasonable assurance regarding the reliability of financial statements in
accordance with statutory accounting principles;

(c)
A statement that briefly describes the
approach or process by which management evaluated the effectiveness of its
internal control over financial reporting;

(d)
A statement that briefly describes the
scope of work that is included and whether any internal controls were
excluded;

(e)
Disclosure of any
unremediated material weaknesses in internal control over financial reporting
identified by management as of December thirty-first immediately preceding.
Management is not permitted to conclude that the internal control over
financial reporting is effective to provide reasonable assurance regarding the
reliability of financial statements in accordance with statutory accounting
principles if there is one or more unremediated material weakness in its
internal controls over financial reporting;

(f)
A statement regarding the inherent
limitations of internal control systems; and

Management shall document and make available upon financial
condition examination the basis upon which its assertions, required in above,
are made. Management may base its assertions, in part, upon its review,
monitoring and testing of internal controls undertaken in the normal course of
its activities.

(i)
Management shall
have discretion as to the nature of the internal control framework used, and
the nature and extent of documentation, in order to make its assertion in a
cost effective manner, as such, may include assembly of or reference to
existing documentation.

(ii)
Management's report on internal control over financial reporting, required
above, and any documentation provided in support thereof during the course of a
financial condition examination, shall be kept confidential by the
superintendent.

(1)
Upon written application
of any insurer, the superintendent may grant an exemption from compliance with
any and all provisions this rule if the superintendent finds, upon review of
the application, that compliance with this rule would constitute a financial or
organizational hardship upon the insurer. An exemption may be granted at any
time and from time to time for any specified period. Domestic insurers
retaining an independent certified public accountant on the effective date of
this rule shall comply with this rule for the year ending December 31, 2008,
and each year thereafter unless the superintendent permits otherwise. Domestic
insurers not retaining an independent certified public accountant on the
effective date of this rule shall meet the following schedule for compliance,
unless the superintendent gives his or her written permission otherwise.

(a)
For the year ending December 31, 2008,
file with the superintendent an audited financial report:

(b)
For the year ending December 31, 2009,
and each year thereafter, such insurers shall file with the superintendent all
reports and communications required by this rule.

(2)
Foreign insurers shall comply with this
rule for the year ending December 31, 2009, and each year thereafter, unless
the superintendent gives his or her written permission otherwise.

(3)
The requirements of paragraph
(G) of
this rule shall be in effect for audits of the year beginning January 1, 2010
and thereafter.

(4)
The
requirements of paragraph (N) of this rule are to be in effect January 1,
2010. An insurer or group of insurers that is not required to have independent
audit committee members or only a majority of independent audit committee
members (as opposed to a supermajority) because the total written and assumed
premium is below the threshold and subsequently becomes subject to one of the
independence requirements due to changes in premium shall have one year
following the year threshold is exceeded (but not earlier than January 1, 2010)
to comply with the independence requirements. Likewise, an insurer that becomes
subject to one of the independence requirements as a result of a business
combination shall have one calendar year following the date of acquisition or
combination to comply with the independence requirements.

(5)
The requirements of paragraph
(Q) of
this rule and other modified sections

(identify modified sections), except for paragraph
(N) of
this rule covered above, are effective beginning with the reporting period
December 31, 2010 and each year thereafter. An insurer or group of insurers
that is not required to file a report because the total written premium is
below the threshold and subsequently becomes subject to the reporting
requirements shall have two years following the year the threshold is exceeded
(but not earlier than December 31, 2010) to file a report. Likewise, an insurer
acquired in a business combination shall have two calendar years following the
date of acquisition or combination to comply with the reporting
requirements.

In the case of Canadian and British insurers, the audited
financial report shall be defined as the annual statement of total business on
the form filed by such companies with their domiciliary supervision authority
duly audited by an independent chartered accountant. For such insurers, the
letter required in paragraph (F)(2) of this rule shall state that the
accountant is aware of the requirements relating to the audited financial
report filed with the superintendent pursuant to paragraph
(Q) of
this rule and shall affirm that the opinion expressed is in conformity with
such requirements.

If any paragraph, term or
provision of this rule is adjudged invalid for any reason, the judgment shall
not affect, impair or invalidate any other paragraph, term or provision of this
rule, but the remaining paragraphs, terms and provisions shall be and continue
in full force and effect.

(A)
Purpose. The purpose of this rule is to
establish the form and content of the disclaimer to the summary document
describing the general purposes and current limitations of the Ohio life and
health insurance guaranty association and the notice that the policy or
contract, or portion thereof, may not be covered by the association.

(B)
Authority. This rule is issued pursuant
to the authority vested in the superintendent under section
3956.18 of the Revised Code.

(C)
Applicability. This rule
applies to all insurers and agents providing, soliciting or negotiating
coverage for direct, non-group life, health, annuity, and supplemental policies
or contracts, for certificates under direct group policies and contracts, and
for unallocated annuity contracts issued by member insurers.

(D)
Delivery of summary document. Division
(B)(2) of section 3956.18 of the Revised Code
provides that no insurer shall deliver a policy or contract described in
division (B)(1) of section
3956.04 of the Revised Code
unless the document is delivered to the policy or contract holder prior to or
at the time of delivery of the policy or contract, except if division (D) of
section 3956.18 of the Revised Code
applies. The document also shall be available upon request by a policy or
contract holder.

In providing the summary document described in division (B)(2)
of section 3956.18 of the Revised Code, the
insurer must use the exact form of the disclaimer set forth in appendix I to
this rule.

(E)
Policy or
contract not covered by association. Division (D) of section
3956.18 of the Revised Code
provides that no insurer or agent may deliver a policy or contract described in
division (B)(1) of section
3956.04 of the Revised Code, all
or a portion of which is excluded under division (B)(2)(a) of section
3956.04 of the Revised Code from
coverage under Chapter 3956. of the Revised Code unless the insurer or agent,
prior to or at the time of delivery gives the policy or contract holder a
separate written notice that clearly and conspicuously discloses that the
policy or contract, or a portion of the policy or contract, is not covered by
the association.

In providing the document described in division (D) of section
3956.18 of the Revised Code, the
insurer or agent must use the exact form set forth in appendix I to this rule.

(F)
Severability. If any
section, term or provision of this rule is adjudged invalid for any reason,
such judgment shall not affect, impair or invalidate any other section, term or
provision of this rule, but the remaining sections, terms and provisions shall
be and continue in full force and effect.

Appendix I

The Ohio Life and Health Guaranty Association may not provide
coverage for this policy. If coverage is provided, it may be subject to
substantial limitations or exclusions, and require continued residency in Ohio.
You should not rely on coverage by the Ohio Life and Health Insurance Guaranty
Association in selecting an insurance company or in selecting an insurance
policy. Coverage is NOT provided for your policy or any portion of it that is
not guaranteed by the insurer or for which you have assumed the risk, such as a
variable contract sold by prospectus. You should check with your insurance
company representative to determine if you are only covered in part or not
covered at all. Insurance companies or their agents are required by law to give
or send you this notice. However, insurance companies and their agents are
prohibited by law from using the existence of the guaranty association to
induce you to purchase any kind of insurance policy.

The purpose of this rule is to set forth uniform minimum
standards for the investigation and disposition of property and casualty claims
arising under insurance contracts or certificates issued to residents of Ohio.
It is not intended to cover claims involving workers' compensation, or
fidelity, suretyship, and boiler and machinery insurance. The provisions of
this rule are intended to define procedures and practices which constitute
unfair claims practices. Nothing in this rule shall be construed to create or
imply a private cause of action for violation of this rule.

(4)
"Contract" means any insurance policy or document containing the terms of the
agreement wherein one party, the insurer, assumes certain obligations including
financial obligations that arise as a result of a loss sustained by another
party, the insured, or to any other party that has rights under the
agreement.

(5)
"Days" means
calendar days. However, when the last day of a time limit stated in this rule
falls on a Saturday, Sunday, or holiday, the time limit is extended to the next
immediate following day that is not a Saturday, Sunday, or holiday.

(7)
"Documentation" includes, but is not
limited to, all communications, transactions, notes, work papers, claim forms,
bills and explanation of benefits forms pertaining to the claim.

(8)
"First party claimant" means any
individual, corporation, association, partnership or other legal entity
asserting a right to payment under an insurance policy or insurance contract
arising out of the occurrence of the contingency or loss covered by the policy
or contract.

(9)
"Insurer" shall be defined as set forth in division (E) of section
3901.32 of the Revised
Code.

(10)
"Investigation" means all activities of an insurer directly or indirectly
related to the determination of liability under an insurance contract which is
in effect or alleged to be in effect.

(11)
"Like kind and quality part" means a salvage motor vehicle part equal to or
better than the replaced part that is acquired from a licensed salvage motor
dealer.

(12)
"Notification of
claim" means any notification, under the terms of an insurance contract, to an
insurer or its agent, by a claimant, which reasonably apprises the insurer of
the facts pertinent to a claim.

(13)
"Person" shall be defined as set forth in section
3901.19 of the Revised
Code.

(14)
"Practice" means a type of activity or conduct engaged in by an insurer with
such frequency as to constitute a customary procedure or policy routinely
followed in the settlement of insurance claims. A single act is not a business
practice. However, an act that is malicious, deliberate, conscious and knowing
may be the basis for corrective action ordered only by the superintendent
without a showing that the conduct is a practice.

(16)
"Third party claimant" means any individual, corporation, association,
partnership or other legal entity asserting a claim against any other
individual, corporation, association, partnership or legal entity.

(17)
"Proof of loss"
means a document from the claimant that provides sufficient information from
which the insurer can determine the existence and the amount of the
claim.

An insurer's claim files are subject to examination by the
superintendent of insurance or by the superintendent's duly appointed
designees. To aid in such examination:

(1)
An insurer shall maintain claim data that
is accessible and retrievable for examination. Such data shall include number,
line of coverage, date of loss and date of payment or date of denial or date
when claim is closed without payment. The data for closed claims shall be kept
for no less than three years or until the completion of the next financial
examination conducted by the state of domicile, whichever is greater. Data for
claims where the claims payment is less than one thousand dollars, or for
towing, labor, glass or rental reimbursement may be kept in summary
form.

(2)
An insurer must be able
to reconstruct its activities in regard to any claim, by documentation
appropriate for the type and size of the claim. If the claim is closed, the
time period for retention is set forth in paragraph (D)(1) of this
rule.

(3)
If an insurer does not
maintain hard copy files, claim files shall be accessible and be capable of
duplication to hard copy.

(1)
An insurer shall fully disclose to first
party claimants all pertinent benefits, coverages or other provisions of an
insurance contract under which a claim is presented.

(2)
No agent shall willfully conceal from
first party claimants benefits, coverages or other provisions of any insurance
contract when such benefits, coverages or other provisions are pertinent to a
claim.

(3)
No insurer shall deny a
claim based on the first party claimant's failure to make available for
inspection the property which is the subject of the claim unless there is
documentation of breach of the policy provisions in the claim file.

(4)
No insurer shall deny a claim based upon
the failure of a first party claimant to give written notice of loss within a
specified time limit unless the notice is required by a policy condition, or a
first party claimant's failure to give written notice after being requested to
do so by the insurer is so unreasonable as to constitute a breach of the
claimant's duty to cooperate with the insurer.

(5)
No insurer shall indicate to a first
party claimant on a payment draft, check or in any accompanying letter that the
payment is final or a release of any claim unless the policy limit has been
paid or the first party claimant and the insurer have agreed to a compromise
settlement regarding coverage and the amount payable under the insurance
contract.

(6)
No insurer shall
issue checks or drafts in partial settlement of a loss or claim under a
specific coverage that contains language purporting to release the insurer or
its insured from total liability.

(1)
Notification of a
claim given to an agent of an insurer shall be notification to the
insurer.

(2)
An insurer shall
acknowledge the receipt of a claim within fifteen days of receiving such
notification. An insurer may satisfy this requirement by making payment within
this fifteen day period. An insurer may also satisfy this
requirement by providing necessary claim forms and complete instructions to the
claimant within this fifteen day
period.

(3)
An insurer shall
respond within fifteen days to any communication from a claimant, when that
communication suggests a response is appropriate. In the event that a complaint
has been filed by a claimant in any court, an insurer is not obligated to
respond within this time period and any communication between the claimant and
the insurer will be subject to the appropriate rule of procedure for the court
in which the lawsuit was filed.

(4)
An insurer shall, within twenty-one days of receipt of an inquiry from the
department regarding a claim, furnish the department with a reasonable response
to the inquiry.

(1)
An insurer shall within twenty-one days
of the receipt of properly executed proof(s) of loss decide whether to accept
or deny such claim(s). If more time is needed to investigate the claim than the
twenty-one days allow, the insurer shall notify the claimant within the
twenty-one day period, and provide an explanation of the need for more time. If
an extension of time is needed, the insurer has a continuing obligation to
notify the claimant in writing, at least every forty-five days, of the status of the investigation and the continued
time for the investigation.

If the form and execution of a proof of loss is material to an
insurer, the insurer shall immediately provide the claimant with the specific
documents and specific instructions so the claimant can submit the claim. An
insurer shall not otherwise deny a claim solely on the basis the proof of loss
is not on the insurer's usual form.

If an insurer reasonably believes, based upon information
obtained and documented within the claim file, that a claimant has fraudulently
caused or contributed to the loss as represented by a properly executed and
documented proof of loss, such information shall be presented to the fraud
division of the department within sixty days of receipt of the proof of loss.
Any person making such report shall be afforded such immunity and the
information submitted will be confidential as provided by sections
3901.44 and
3999.31 of the Revised
Code.

(2)
No insurer shall
deny a claim on the grounds of a specific policy provision, condition or
exclusion unless reference to such provision, condition, or exclusion is
included in the denial. The claim file of the insurer shall contain
documentation of the denial in accordance with paragraph (D) of this
rule.

(3)
Except as otherwise
provided by policy provisions, an insurer shall settle first party claims upon
request by the insured with no consideration given to whether the
responsibility for payment should be assumed by others.

(4)
No insurer shall require an insured to
submit to a polygraph examination unless authorized under the applicable
insurance contract.

(5)
Notice
shall be given to claimants at least sixty days before the expiration of any statute of
limitation or contractual limit, where the insurer has not been advised that
the claimant is represented by legal counsel.

(6)
An insurer shall tender payment to a
first party claimant no later than ten days after acceptance of a claim if the
amount of the claim is determined and is not in dispute, unless the settlement
involves a structured settlement, action by a probate court, or other
extraordinary circumstances as documented in the claim file.

(7)
If a claim involves a non-negligent
party's property loss and multiple liability insurers, the multiple liability
insurers shall adjust the property loss within a reasonable time and pay the
non-negligent party's loss in equal shares. After payment, the multiple
liability insurers may then pursue available remedies to resolve the question
of responsibility for the non-negligent party's loss.

(8)
If a claim involves multiple coverages
under any policy, no insurer shall withhold payment under any such coverage
when the payment is known, the payment is not in dispute, and the payment would
extinguish the insurer's liability under that coverage. No insurer shall
withhold such payment for the purpose of forcing settlement on all other
coverage to effect a single payment.

(9)
An insurer must document the application
of comparative negligence to any claim settlement. Such information shall be
fully disclosed to the claimant upon the claimant's written request. An insurer
shall not use pattern settlements as set forth in division (P) of section
3901.21 of the Revised
Code.

(10)
An insurer shall not use
settlement practices that result in compelling first party claimants to
litigate by offering substantially less than the amounts claimed compared to
the amount ultimately recovered in actions brought by such
claimants.

(1)
When partial losses will be settled on
the basis of a written estimate prepared by or for an insurer, the insurer
shall supply the claimant a copy of the estimate upon which the proposed
settlement is based. If the claimant subsequently claims that necessary repairs
will exceed the written estimate, the insurer shall pay the difference between
the written estimate and a higher estimate obtained by the claimant or promptly
provide the claimant with the name of at least one repair shop that will make
the repairs for the amount of the written estimate. If the insurer provides the
name of only one repair shop, it shall ensure that the repairs are performed in
a workmanlike manner. The insurer shall maintain documentation of all
communications with the claimant pursuant to this paragraph.

(2)
If an insurer reduces a claim amount
because of betterment, depreciation or comparative negligence, it shall
maintain all information pertaining to the reduction in the claim file. Such
deductions shall be itemized and specified on the written estimate as to dollar
amount and shall be appropriate for the amount of deductions.

(3)
An insurer may reduce a claim amount
because of betterment deductions only if the deductions reflect a measurable
decrease in market value due to the poorer condition of, or prior damage to,
the vehicle; or reflect the general overall condition of the
vehicle, considering its age, for the wear and tear or rust, and/or missing parts, limited to no more of a deduction
than the replacement costs of part or parts.

(4)
When partial losses will be settled on
the basis of a written estimate prepared by or for an insurer, the estimate
must clearly indicate the use of the parts in compliance with section
1345.81 of the Revised Code.
When like kind and quality parts are expected to be used in the repair, the
estimate shall clearly indicate the location of the licensed salvage dealer
where the like kind and quality parts are to be obtained.

(5)
An insurer which elects to repair and
designates a specific repair shop for automobile repairs shall cause the
damaged automobile to be restored to its condition prior to the loss. The
insurer shall assess no additional cost against the claimant other than as
stated in the policy, and the repairs should be effected within a reasonable
period of time.

(6)
In settlement
of claimants' automobile total losses on the basis of actual cash value or
replacement of the automobile with another vehicle of like kind and quality, an
insurer which elects to offer a replacement automobile shall:

(a)
Provide an automobile by the same
manufacturer, of the same or newer year, of similar body style, with similar
options and mileage as the claimant's vehicle and in as good or better overall
condition than the first party automobile prior to loss;

(b)
Ensure that the automobile is available
for inspection within a reasonable distance of the claimant's
residence;

(c)
Pay all applicable
taxes, license fees, and other fees incident to transfer of evidence of
ownership of the automobile at no cost to claimant other than any deductible
provided in the policy; and

(d)
Document the offer of the replacement automobile and any rejection of the offer
in the claim file.

(7)
In settlement of claimants' automobile total losses on the basis of actual cash
value or replacement of the automobile with another of like kind and quality,
an insurer which elects to offer a cash settlement to claimant shall base the offer upon the actual cost to
purchase a comparable automobile less any applicable deductible amount
contained in the policy, and/or deduction for betterment as contained in
paragraph (H)(2) of this rule. The settlement value may be derived from:

(a)
The average cost of two or more
comparable automobiles in the local market area if comparable automobiles are
or were available to consumers within the last ninety days; or

(b)
The average cost of two or more
comparable automobiles in areas proximate to the local market area, including
the closest in-state or out-of-state major metropolitan areas, that are or were available to consumers within the
last ninety days if comparable automobiles are not available
pursuant to paragraph (H)(7)(a) of this rule; or

(c)
The average of two or more quotations
obtained by the insurer from two or more licensed dealers located within the
local market area if comparable automobiles are not available pursuant to
paragraphs (H)(7)(a) and (H)(7)(b) of this rule; or

(d)
The cost as determined from a generally
recognized used motor vehicle industry source such as:

(i)
An electronic database if the pertinent
portions of the valuation documents generated by the database are provided by
the insurer to the claimant upon request; or

(ii)
A guidebook that is generally available to the general public if the insurer
identifies the guidebook used as the basis for the cost to the claimant upon
request, and
to which appropriate adjustments for condition, mileage
and major options are made and documented in the claim file.

(e)
Any method or source chosen as specified
in paragraph (H)(7)(d) of this rule shall be used consistently over a period of
time by the insurer.

(f)
If within
thirty days of receipt by the claimant of a cash settlement for the total loss
of an automobile, the claimant purchases a replacement automobile, the insurer
shall reimburse the claimant for the applicable sales taxes incurred on account
of the claimant's purchase of the automobile, but not to exceed the amount that
would have been payable by the claimant for sales taxes on the purchase of an
automobile with a market value equal to the amount of the cash settlement. If
the claimant purchases an automobile with a market value less
than the amount of the cash settlement, the insurer shall reimburse only the
actual amount of the applicable sales taxes on the purchased automobile. If the
claimant cannot substantiate such purchase and the payment of such sales taxes
by submission to the insurer of appropriate documentation within thirty-three
days after receipt of the cash settlement, the insurer shall not be required to
reimburse the claimant for such sales taxes. In lieu of reimbursement, the
insurer may pay directly the applicable sales taxes to the claimant at the time
of the cash settlement.

An insurer that settles a total loss on a cash settlement basis
must maintain in the claim file the documentation used to determine the loss.
Such information shall be provided to the first party claimant upon request. An
insurer shall notify the first party claimant of any rights to renegotiate the
settlement if a comparable vehicle is not available for purchase within
thirty-five days of receipt of the settlement.

When an insurer elects to offer a replacement vehicle available
to the claimant, the insurer shall provide all the details where such vehicle
is available including the vehicle identification number.

(g)
An insurer that settles a total loss
claim shall provide written notice to the claimant of the right to
reimbursement of applicable sales tax as specified in paragraph (H)(7)(f) of
this rule. The notice shall be issued to the claimant simultaneously with the
conveyance of the settlement check to the claimant. If an insurer elects to pay
the applicable sales taxes directly to the claimant at the time of the cash
settlement in lieu of reimbursement as provided in paragraph (H)(7)(f) of this
rule, the insurer is not required to provide written notice of the claimant's
right to sales tax reimbursement.

(8)
An insurer shall not require a claimant
to travel an unreasonable distance to inspect a replacement automobile, to
obtain a repair estimate, or to have the automobile repaired at a specific
repair shop.

(9)
An insurer shall
provide notice to a claimant prior to termination of payment for automobile
storage charges. The insurer shall document all actions taken pursuant to this
paragraph in accordance with paragraph (D) of this rule.

(10)
An insurer shall include the first party
claimant's deductible, if any, in subrogation demands. The insurer shall share
any subrogation recovery received on a proportionate basis
with the first party claimant, unless the first party claimant's deductible has
been paid in advance or recovered. The insurer shall not deduct expenses from
this amount except that an outside attorney or collection agency retained to
collect such recovery may be paid a pro rata share of his expenses for
collecting this amount.

(1)
If a fire and extended coverage insurance
policy provides for the adjustment and settlement of first party losses based
on replacement cost, the following shall apply:

(a)
When a loss requires replacement of an
item or part, any consequential physical damages incurred in making such repair
or replacement not otherwise excluded by the policy, shall be included in the
loss.

(b)
When an interior or
exterior loss requires replacement of an item and the replaced item does not
match the quality, color or size of the item suffering the loss, the insurer
shall replace as much of the item as to result in a reasonably comparable
appearance.

(c)
When an insurer
settles a loss that results in the insured paying a portion of the repair or
replacement as betterment, the insurer shall maintain documentation of the
basis for computing the betterment charge, and the insured's agreement to such
charge prior to incurring the expense of the repair or replacement.

(2)
If a fire and extended
coverage insurance policy provides for the adjustment and settlement of losses
on an actual cash value basis, the following
shall apply:

(a)
The insurer shall determine
actual cash value by determining the replacement cost of property at the time
of loss, including sales tax, less any depreciation. Upon the insured's
request, the insurer shall provide documentation detailing all depreciation
deductions.

(b)
If the insured's
interest is limited because his property has nominal or no economic value, or a
value disproportionate to replacement cost less depreciation, the insurer is
not required to comply with paragraph (I)(2)(a) of this rule regarding the
determination of actual cash value. However, the insurer shall provide upon the
insured's request, a written explanation of the basis for limiting the amount
of recovery along with the amount payable under the policy.

If any paragraph, term or provision of
this rule is adjudged invalid for any reason, the judgment shall not affect,
impair or invalidate any other paragraph, term or provision of this rule, but
the remaining paragraphs, terms and provisions shall be and continue in full
force and effect.

This rule is issued pursuant to section
3901.041 of the Revised Code
which provides that the superintendent of insurance shall adopt, amend, and
rescind rules and make adjudications, necessary to discharge the
superintendent's duties and exercise the superintendent's powers, including,
but not limited to, the superintendent's duties and powers under Chapters 1751.
and 1753. and Title XXXIX of the Revised Code, subject to Chapter 119. of the
Revised Code.

Sections
3901.20 and
3901.21 of the Revised Code
prohibit unfair or deceptive practices in the business of insurance and define
certain acts or practices as unfair or deceptive. Section
3901.21 also provides that the
enumeration of specific unfair or deceptive acts or practices in the business
of insurance is not exclusive or restrictive, or intended to limit the powers
of the superintendent of insurance to adopt rules to implement section
3901.21 or to take action under
other sections of the Revised Code.

The purpose of this rule is to clearly define certain unfair
practices and to set forth standards with respect to insurers' and agents' use
of credit history and credit scores in connection with underwriting and rating
personal lines coverage.

(1)
"Adverse action" has the same meaning as
defined in the Fair Credit Reporting Act,
15 U.S.C. 1681 et seq. (1998), and includes a denial or
cancellation of, an increase in any charge for, or a reduction or other adverse
or unfavorable change in the terms of coverage or amount of, any insurance,
existing or applied for, in connection with the underwriting or rating of
insurance. Issuance of a policy at a rate higher than that which the consumer
would have received if the consumer's credit history had not been taken into
account is an adverse action.

(3)
"Credit history" means any
written, oral, or other communication of any information bearing on a
consumer's creditworthiness, credit standing, or credit capacity that is used
or expected to be used, or collected in whole or in part, for the purpose of
serving as a factor in determining rates, placement within a tier or with an
affiliated company, or eligibility for coverage.

(4)
"Credit score" means a number or rating
that is derived from an algorithm, computer application, model or other process
that is based in whole or in part on credit history.

(5)
"Insurance score" and "credit based
insurance score" have the same meaning: a number or rating that is derived from
an algorithm, computer application, a model or other process that is based in
whole or in part on a credit score or credit history, for the purpose of
predicting the future insurance loss exposure of a consumer (that is, any
insured or applicant).

(7)
"Consumer reporting agency" means any
person which, for monetary fees, dues, or on a cooperative nonprofit basis,
regularly engages in whole or in part in the practice of assembling or
evaluating consumer credit information or other information on consumers for
purposes of furnishing such information to third parties.

Credit history or a credit score or any aspect thereof, either
individually or collectively, may not be used without consideration of any
other applicable underwriting or rating factor as the sole basis for:

This paragraph does not prohibit an insurer from raising a
premium rate at renewal based on a change in credit history, in a credit score,
or in the actuarial indications for a particular credit history or credit score
if other non-credit related factors are also considered in the total premium
determination.

No insurer underwriting or rating a policy of personal lines
insurance shall use any of the following as a negative factor in any credit
scoring methodology or in reviewing the credit history of any consumer:

(3)
Disputed information that is currently
under investigation by the consumer reporting agency, if so identified on the
records of such agency;

(4)
Collection accounts with a medical industry code, if so identified on the
records of the consumer reporting agency;

(5)
Multiple lender inquiries, if coded by
the consumer reporting agency on the consumer's credit report as being from the
home mortgage industry and made within thirty days of one another, unless only
one inquiry is considered; or

(6)
Multiple lender inquiries, if coded by the consumer reporting agency on the
consumer's credit report as being from the automobile lending industry and made
within thirty days of one another, unless only one inquiry is considered.

(1)
The consumer must be
provided notice either prior to or at the time the insurance application is
taken that credit history or a credit score may be obtained and used in
connection with underwriting or rating a policy. Such notice shall either be
written or provided to the consumer in the same medium as the application for
insurance. The insurer need not provide such notice to any insured on a renewal
policy, if such notice has previously been provided.

(2)
If an adverse action is taken as a result
of credit history or a credit score the following disclosures must be made to
the consumer in writing within thirty days of the date the adverse action is
taken:

(a)
The insurer must identify and
describe the nature of the adverse action;

(b)
The insurer must describe the significant
factors of the credit history or credit score that resulted in the adverse
action, which may include the descriptive credit explanations provided by
credit scoring vendors; and

(i)
The name, address, and telephone
number of the consumer reporting agency (including a toll-free telephone number
established by the agency if the agency compiles and maintains files on
consumers on a nationwide basis) that furnished the consumer information;

(ii)
A statement that the consumer
reporting agency did not make the decision to take the adverse action and is
unable to provide the consumer with the specific reasons why the adverse action
was taken;

(iii)
Notice to the
consumer of the consumer's right to obtain a free copy of the consumer's credit
report from the consumer reporting agency; and

(iv)
Notice to the consumer of the consumer's
right to dispute with the consumer reporting agency the accuracy or
completeness of any information in a credit report furnished by the agency.

(1)
If credit history or a credit score, or
any aspect thereof, is considered in underwriting or rating a consumer and a
consumer reporting agency determines that the credit information is inaccurate
or incomplete and the insurer receives notice of this determination from a
consumer or a consumer reporting agency, the insurer shall, within thirty days
after receiving the notice:

(2)
If it is determined by the
re-underwriting or re-rating in accordance with paragraph (H)(1) of this rule
that the consumer has overpaid the premium, the insurer shall refund to the
consumer the amount of the overpayment of premium. Such payment shall be
calculated back to the shorter of:

(3)
After any policy of insurance
has been issued and in the absence of a determination of the consumer reporting
agency that the consumer's information is inaccurate or incomplete as described
in paragraph (H)(1) of this rule, the insurer must recheck the insured's credit
history or credit score at the written request of the insured, but no more than
once every twelve months. The insurer may wait to recheck the credit
information until the next renewal. The insurer shall adjust the premium or
coverage of any insured whose credit history or credit score was rechecked
under this section that reflects any change in the insured's credit history or
credit score. Any such premium or coverage adjustment shall be applied
prospectively to the next policy term.

(1)
Section
3901.20 of the Revised Code
prohibits insurers from engaging in unfair or deceptive acts. Section
3901.21 of the Revised Code
defines as an unfair and deceptive act the following unfair discriminatory
conduct:

Making or permitting any unfair discrimination between
individuals of the same class and of essentially the same hazard in the amount
of premium, policy fees, or rates charged for any policy or contract of
insurance, other than life insurance, or in the benefits payable thereunder, or
in underwriting standards and practices or eligibility requirements, or in any
of the terms or conditions of such contract, or in any other manner whatever.

(2)
Division (A) of
section 3937.02 and division (C) of
section 3935.03 of the Revised Code set
forth the factors an insurer or rating organization may consider in
establishing rates for property and casualty insurance. Division (C) of section
3937.02 of the Revised Code
provides that risks may be grouped by classification for the establishment of
rates and minimum premiums, and states:

Classification rates may be modified to produce rates for
individual risks in accordance with rating plans which establish standards for
measuring variations in hazards or expense provisions, or both. Such standards
may measure any differences among risks that can be demonstrated to have a
probable effect upon losses or expenses.

(3)
Division (D) of section
3937.02 of the Revised Code
further provides: "Rates shall not be excessive, inadequate, or unfairly
discriminatory."

In order to comply with the foregoing paragraphs, insurers
shall abide by the following guidelines:

(a)
Insurers shall establish that credit
history and credit scores used in underwriting or rating determinations are
valid risk characteristics and are used in accordance with actuarial principles
and standards of practice.

(b)
If
a consumer has no available credit history (known as a "no hit"), has
insufficient credit history to develop a credit score (known as "no score"), or
the available credit history is not used for rating, the consumer must be
underwritten and rated in accordance with actuarial principles and standards of
practice.

(c)
Insurers shall not
use credit history or credit scores for arbitrary, capricious or unfairly
discriminatory purposes. Credit history and credit scores shall not be based on
race, color, religion, national origin, sex, marital status, handicap, or age.

(d)
Insurers must maintain,
implement and make available standards concerning how credit history and credit
scores affect underwriting and rating decisions. Insurers shall file with the
superintendent all risk classification criteria and rating manuals that relate
to credit history and credit scores.

(e)
If a credit scoring model is modified or
if its use in determining rates or rating plans is modified, the insurer shall
re-file risk classification criteria and rating manuals with the
superintendent, and shall re-establish that the credit scores are valid risk
characteristics and are used in accordance with actuarial principles and
standards of practice.

If any provision of this rule or the application thereof to any
person or circumstance is for any reason held to be invalid, the remainder of
the rule and the application of the remaining provisions to such persons or
circumstances shall not be affected thereby.

(a)
Filing of a petition of merger or
consolidation of a life, accident or health insurance company. Fifteen hundred
dollars.

(b)
Filing for approval of
a plan of reinsurance that exceeds the limits set forth in section
3907.12 of the Revised Code, or
a plan of assumption reinsurance on policies issued by a domestic insurance
company. Fifteen hundred dollars.

Filing of any policy, certificate, endorsement, application or
form for the purpose of determining compliance. Multiple forms relating to a
single policy may be filed together for one fee, otherwise, each policy,
certificate, endorsement, application, or form is considered as a separate
filing. Fifty dollars.

Filing of any policy, certificate, endorsement, application or
form for the purpose of determining compliance. Multiple forms relating to a
single policy may be filed together for one fee, otherwise, each policy,
certificate, endorsement, application, or form is considered as a separate
filing. Fifty dollars

Filing of any policy, certificate, endorsement, application or
form for the purpose of determining compliance. Multiple forms relating to a
single policy may be filed together for one fee, otherwise, each policy,
certificate, endorsement, application, or form is considered as a separate
filing. Fifty dollars.

Filing of any policy, certificate, endorsement, application or
form for the purpose of determining compliance. Multiple forms relating to a
single policy may be filed together for one fee, otherwise, each policy,
certificate, endorsement, application or form is considered as a separate
filing. Fifty dollars.

Filing of any policy, certificate, endorsement, application or
form for the purpose of determining compliance. Multiple forms relating to a
single policy may be filed together for one fee, otherwise, each policy,
certificate, endorsement, application or form is considered as a separate
filing. Fifty dollars.

(a)
Any filing per insurer, required to be
submitted to the superintendent. Multiple forms relating to a single policy may
be filed together for one fee, otherwise, each form or policy is considered a
separate filing. Fifty dollars/filing.

(b)
Any excess rate filing required to be
submitted to the superintendent pursuant to division (G) of section
3935.04 of the Revised Code is
exempt from the filing fee.

(a)
Any filing per insurer, required to be
submitted to the superintendent. Multiple forms relating to a single policy may
be filed together for one fee, otherwise, each form or policy is considered a
separate filing. Fifty dollars.

(b)
Any special filing pursuant to division (E) of section
3937.03 of the Revised Code and
any excess rate filing pursuant to division (G) of section
3937.03 of the Revised Code that
are required to be submitted to the superintendent are exempt from the filing
fee.

(D)
Whenever another state or jurisdiction charges a greater fee for a transaction
listed in this rule to an insurer domiciled in Ohio, then the superintendent
may charge that higher fee to the insurer not domiciled in Ohio, who seeks to
have the transaction completed in this state.

(1)
The
department will invoice the insurer for the fee charged for the transactions
listed in paragraph (C)(3)(a) of this rule.

(2)
Fees charged for the transactions listed
in paragraphs (C)(1), (C)(2), (C)(3)(b), (C)(4), (C)(6) and (C)(7) of this rule
shall be submitted with the first documents sent to the department.

(3)
Fees charged for the transactions listed
in paragraphs (C)(5), (C)(8), (C)(9), (C)(10), (C)(11), (C)(12) and (C)(13) of
this rule shall be paid via the "EFT" functionality built into the "System for
Electronic Rate and Form Filings" commonly known as "SERFF".

(4)
All fees collected pursuant to this rule
shall be deposited to the credit of the department of insurance operating fund
created pursuant to section
3901.021 of the Revised
Code.

If any paragraph, term or provision of this rule is adjudged
invalid for any reason, the judgment shall not affect, impair or
invalidate any other paragraph, term or provision of this rule, but the
remaining paragraphs, terms and provisions shall be and continue in full force
and effect.

The purpose of this rule is to prescribe the standard
credentialing form to be used when credentialing or recredentialing providers.
For purposes of this rule, the term "providers" shall have the same meaning as
in division (P) of section
3963.01 of the Revised Code.

All credentialing and recredentialing of physicians and
non-physician individual providers identified in division (P) of section
3963.01 of the Revised Code
shall be performed using the credentialing form available from the council for
affordable quality healthcare (CAQH) in electronic or paper format. The CAQH
credentialing form shall be referred to as the department of insurance part A
credentialing form. Copies of this form may be obtained electronically from
CAQH or from the department of insurance. The department of insurance part B
credentialing form shall be used to credential hearing aid dealers, home health
agencies, hospice care providers and all other providers, with the exception of
hospitals, that are not individuals. Copies of this form may be obtained from
the department of insurance. The credentialing forms prescribed by this rule
may be reproduced as needed and may be amended from time to time.

If any provision of this rule or the application thereof to any
person or circumstance is for any reason held to be invalid, the remainder of
the rule and the application of such provision to other persons or
circumstances shall not be affected thereby.

(1)
"Medical, dental, optometric and
chiropractic claims" include those claims asserted against a risk located in
this state that either:

(a)
Meet the
definition of "medical claim," "dental claim," "optometric claim," or
"chiropractic claim" in section
2305.113 of the Revised Code,
or

(b)
Have not been asserted in
any civil action, but that otherwise meet the definition of "medical claim,"
"dental claim," "optometric claim," or "chiropractic claim" in section
2305.113 of the Revised
Code.

(2)
"Risk
retention group" has the same meaning as in section 3960.01 of the Revised
Code.

(3)
"Surplus lines insurer"
means an insurer that is not licensed to do business in this state, but is
nonetheless approved by the department to offer insurance because coverage is
not available through licensed insurers.

(4)
"Self-insurer" means any person or
persons who set aside funds to cover liability for future medical, dental,
optometric or chiropractic claims or that otherwise assume their own risk or
potential loss for such claims. "Self-insurer" includes captives.

(D)
Each authorized insurer,
surplus lines insurer, risk retention group, self-insurer, the medical
liability underwriting association if created under section
3929.63 of the Revised Code, or
any other entity that offers medical malpractice insurance to, or that
otherwise assumes liability to pay medical, dental, optometric or chiropractic
claims for, risks located in this state, shall report at least annually to the
superintendent of insurance, or to the superintendent's designee, information
regarding any medical, dental, optometric, or chiropractic claim asserted
against a risk located in this state, if the claim resulted in:

(7)
If the medical, dental,
optometric, or chiropractic claim was filed with the court, the case number and
the name and location of the court;

(8)
In the case of a judgment, the date and
amount of the judgment and, if the judgment is subject to the itemization
requirements in division (B) of section
2323.43 of the Revised Code, a
description of the portion of the judgment that represents economic loss,
non-economic loss and punitive damages, if any;

(9)
In the case of a settlement, the date and
amount of the settlement and, if known, the injured person's incurred medical
expense, wage loss, and other expenses;

(10)
Any loss adjustment expenses allocated
to the claim or, if known, the amount allocated to each covered
person;

(11)
The loss adjustment
expense, broken down between fees and expenses, paid to defense
counsel;

(12)
The date and reason
for final disposition, if no judgment or settlement, and the type of
disposition;

(13)
Unless disclosure
is otherwise prohibited by state or federal law, a summary of the occurrence
which created the claim which shall include:

(a)
The name of the institution, if any, and
the location at which the injury occurred;

(b)
The operation, diagnosis, treatment,
procedure or other medical event or incident giving rise to the alleged
injury;

(F)
Frequency The report(s) required by this
rule shall be filed with the superintendent, or the superintendent's designee,
on or before May first of each year, and shall contain information for the
previous calendar year.

Information reported to the superintendent or the
superintendent's designee pursuant to this rule shall be confidential and
privileged and is not a public record as defined in section
149.43 of the Revised Code. The
information provided under this section is not subject to discovery or subpoena
and shall not be made public by the superintendent or any other person,
including any rating organizations or other agencies designated by the
superintendent to gather and/or compile the information.

(I)
The requirements of this rule do not
apply to reinsurers, reinsurance contracts, reinsurance agreements, or
reinsurance claims transactions.

If any paragraph, term or provision of
this rule is adjudged invalid for any reason, the judgment shall not affect,
impair or invalidate any other paragraph, term or provision of this rule, but
the remaining paragraphs, terms and provisions shall be and continue in full
force and effect.

The purpose of this rule is to safeguard the interest of the
public by allowing reasonable inspection and analysis of insurers' rating plans
on an annual basis for the regulation and monitoring of medical malpractice
premium rates.

(1)
Every insurer issued a
certificate of authority to write medical malpractice insurance in this state
and that issues such insurance in this state, shall at a minimum, file annually
with the superintendent of insurance, appropriate information and exhibits, in
support of the insurer's existing rating plan. If at any time the
superintendent of insurance finds that a rate no longer complies with section
3937.01 to
3937.17 of the Revised Code, the
superintendent may, in accordance with section
3937.04 of the Revised Code,
state that the rate shall no longer be effective.

(2)
In lieu of the filing required in
division (C)(1) a carrier may annually file for a rate adjustment in accordance
with section 3937.03 of the Revised Code.

(3)
Included with a filing
required in divisions (C)(1) or (C)(2), every insurer that issues medical
malpractice insurance in this state, shall file the average, minimum, and
maximum deviation from manual rates due to individual risk premium
modifications, also known as schedule rating credits and debits, or
discretionary credits and debits, applied by the insurer during a twelve month
period which ends no more than six months before the date of the filing. If at
any time the superintendent of insurance finds that the credits and debits
exceed the maximum allowed or may result in inadequate rates or be destructive
of competition or detrimental to solvency of insurers, the superintendent may
in accordance with section
3937.04 of the Revised Code
state that the rate shall no longer be effective.

(4)
The first filing under (C)(1) or (C)(2)
is due within twelve months of the effective date of this rule.

Extensions of time for the filing required under division (C)
may be granted by the superintendent upon a showing by the insurer the reasons
for requesting such extension and a determination by the superintendent of good
cause for the extension. The request for an extension must be submitted in
writing not less than ten days prior to the due date of the required filing.

Each paragraph of this rule and every part of each paragraph is
an independent paragraph and part of a paragraph, and the determination that
any paragraph or subpart of this rule or the application thereof to any person
or circumstance is for any reason held invalid, such invalidity shall not
affect any other paragraph or subpart or application of the rule that can be
given effect without the invalid provision or application.

(1)
"Cash bond" means the full amount
of the bail required to be paid in cash to release a defendant from jail.

(2)
"Power of attorney" means a
legal instrument that is used by a authorized surety company to delegate
authority to a licensed general agent or surety bail bond agent for the posting
of surety bail bonds with a court of law up to a specified monetary amount.

(3)
"Surety bail bond" means a
court accepted bond instrument from a licensed insurance company issued for or
on behalf of an incarcerated person held under criminal charges in any Ohio
mayor, municipal, county, or federal court.

(4)
"Immigration bond" means a federally
accepted bond instrument from a surety company approved by the United States
department of treasury issued for and on behalf of alien detainees held by
United States immigration and customs enforcement, within the department of
homeland security pending a hearing or court appearance; or to guarantee that
an alien will be financially independent during a lawful visit or prolonged
stay to the United States.

(1)
All surety bail bonds submitted to the
court or the custodian of an arrested person must be accompanied by a current,
non-expired, legal power of attorney.

(2)
Only one power of attorney shall be
submitted per bond. The face value of the power shall be equal to or greater
than the amount of the bond set by the court in the single charge or charges
for which the bond and power are being submitted.

(3)
No power of attorney that has been
altered or erased shall be submitted to a court or insurance company.

(4)
No expired power of attorney
shall be submitted to a court or insurance company.

(5)
No power of attorney shall be used or
submitted to a court or insurance company more than once.

(1)
A person holding an Ohio
insurance license with a casualty line of authority conferred pursuant to Title
39 of the Revised Code.

(2)
A
person holding an Ohio surety bail bond line of authority conferred pursuant to
Title 39 of the Revised Code, who has been given a bond power that expressly
allows for the writing of an immigration bond.

No surety bail bond agent shall be employed by, contracted
with, or act as an agent for, or own an ownership interest in any person or
business entity that loans money for, or takes collateral for the loan of money
for, the purpose of posting a cash bond or surety bail bond on behalf of a
defendant.

(1)
A surety bail bond agent shall not
require the transfer of title of any real property as a condition of issuing
the bail bond.

(2)
A surety bail
bond agent may require a defendant, or anyone agreeing to provide real property
as collateral on a defendants behalf, to establish title and unencumbered
value, at the defendants expense, together with mortgage security or other
documents necessary to establish the surety bail bond agent's lien interest in
the real property by the bail agent.

(3)
A surety bail bond agent shall not
provide title, notary, or lien filing services directly or indirectly to the
client or defendant for a fee. A surety bail bond agent shall not receive any
valuable consideration for referring a person for title, notary, or lien filing
services.

(a)
If the security
document has not been filed with the state or a division of the state to
perfect the lien, and the bond has not been called or otherwise needed or used,
the original mortgage or other security document must be stamped cancelled and
returned to the client or defendant within twenty-one days from the end of the
bond.

(b)
If the security document
has been filed with the state or a division of the state to perfect the lien,
and the bond has not been called or otherwise needed or used, a release of the
mortgage or release of the other security document must be completed within
twenty-one days after the end of the bond. A copy of the release containing an
official date/time stamp must be provided to the client within twenty-six days
after the end of the bond.

(1)
The following activities shall constitute
prohibited solicitation by a surety bail bond agent on the grounds of a
courthouse or detention facility:

(a)
Approaching a person not currently a client and in any way initiating
communication concerning bail bond services.

(b)
Writing bonds for an individual without
their direct knowledge and consent.

(c)
Communicating as, or holding oneself out
to be, a court appointed surety bail bond agent or suggesting in any manner
that one has been appointed by a court or other public agency to write a bond
for a particular defendant, or on a particular case.

(d)
Wearing clothing that indicates a person
is in the bail bond industry unless otherwise directed by the court or
detention facility, except the wearing of the issued department of insurance ID
card.

(f)
Distributing a business card, pen, or any other item, that identifies an
individual or business entity as providing surety bail bond services.

(g)
Physically impeding, blocking,
or hindering the public from viewing or obtaining the docket or other
information needed to ascertain the status or procedure of any court process
including all court bonding processes.

(h)
Engaging or hiring any person, directly
or indirectly, to perform any acts listed in paragraphs (I)(1)(a) to (I)(1)(g)
of this rule.

(i)
Any other
activity that may be construed as the sale or solicitation of surety bail
bonds.

(2)
The
following activities shall not constitute prohibited solicitation by a surety
bail bond agent on the grounds of a courthouse or detention facility subject to
the limitations of paragraph (I)(1) of this rule:

(a)
Having personal business matters before a
court or detention facility;

(b)
Attending a scheduled hearing or meeting with any person(s) regarding surety
bail bonds as long as the meeting is arranged with the person(s) prior to the
arrival at the courthouse or detention facility;

If any section, term or provision of this rule is adjudged
invalid for any reason, such judgment shall not affect, impair or invalidate
any other section, term or provision of this rule, but the remaining sections,
terms and provisions shall be and continue in full force and effect.